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House of Commons

Tuesday 25 July 2000

The House met at half-past Two o'clock


[Madam Speaker in the Chair]

City of Newcastle upon Tyne Bill [Lords] (By Order)

Order for Third Reading read.

To be read the Third time on Wednesday 25 October.

Alliance & Leicester Group Treasury plc (Transfer) Bill [Lords] (By Order)

Order for Second Reading read.

To be read a Second time on Wednesday 25 October.

Oral Answers to Questions


The Secretary of State was asked--


1. Mrs. Eleanor Laing (Epping Forest): What recent discussions he has had with the Chancellor of the Exchequer on Government policy relating to the right of Scottish banks to print currency notes after the proposed introduction of the euro. [130567]

The Secretary of State for Scotland (Dr. John Reid): It is with some regret, Madam Speaker, that I rise to take part in what will be your final time in the Chair for Scottish questions. May I take this opportunity, on behalf of the people of Scotland, Members of Parliament from Scotland, and, I am sure, the whole House to thank you for the way in which you have presided over our deliberations for a considerable time? I wish you all the best for the future.

Turning to the question, I have regular discussions with my right hon. Friend the Chancellor of the Exchequer on a wide range of issues. The Government are well aware of the importance of the issue of Scottish Bank notes in the event of United Kingdom membership of economic and monetary union and it remains one of the issues for negotiations if the UK were to join EMU.

Mrs. Laing: I thank the Secretary of State for that full and vague answer. After 300 years of United Kingdom Union in which the Scottish pound has been preserved, does he not find it sad that, because of the Government's attitude to our relationship with the European Union, there is a great risk that the Scottish pound will be abolished? Is he not at all concerned about the risks to the economy of the whole United Kingdom that a European single currency joined by the United Kingdom would have? Has

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he not listened to what Sir Eddie George said today about the great risks that the single currency would bring to the whole of the United Kingdom, including Scotland, or are we to assume that Sir Eddie George is not to be listened to in Scotland because he is the Governor of the Bank of England?

Dr. Reid: My congratulations go to the hon. Lady and the author of that contribution. As I have explained to her already, and as the Minister for Enterprise and Lifelong Learning in the Scottish Parliament, my hon. Friend the Member for Central Fife (Mr. McLeish), has already made plain in his correspondence with the Committee of Scottish Clearing Bankers, the Government--and, incidentally, the Bank of England--agree that the position has not changed recently. No final decision has been taken. We are well aware of the importance of the facility in Scotland to produce pound notes and we will bear that in mind if and when it comes to joining the euro.

Our position is balanced, and not vague as the hon. Lady describes it. It is predicated on the best interests of this country, politically and economically. It is certainly distinguished in its pragmatism from the positions of principle held by the three opposition parties. The Liberal Democrats would join the euro tomorrow, irrespective of the consequences. The Scottish National party takes three positions of principle that change with time, but I understand that the latest incarnation is that it would join at the earliest possible date, irrespective of the consequences. The Conservative party holds the qualified principle--the only one philosophically known to man--that this is matter of absolute principle until the end of the next Parliament, when it ceases to be a principle. All those are absurd positions. We will not be dogmatic; we will act, as a Government, in the best interests of the people of this country.

Mr. John Home Robertson (East Lothian): Does my right hon. Friend agree that the single currency arrangement made between Scotland and England in 1707 has been extremely beneficial to all concerned and that none of my constituents are campaigning for a return to groats and baubees? Does he further agree that entry to a shared European currency on the right terms would be just as beneficial to all the citizens of the United Kingdom?

Dr. Reid: I have to give a qualified answer because my experience does not go back as far as 1707. For as long as I have been around I have thought that we have benefited greatly from that arrangement, and it would be a non-progressive step to go back to groats and baubees. However, I notice that the Conservative party, which aspires to government, wants us to go back to threepenny bits and sixpences and no doubt it will be poles, perches and baubees before we get much further into the debate.

On the euro, we have made it absolutely plain that there is a triple lock. If and when we decide that the criteria have been met, a decision will not only have to be agreed by the Cabinet and the House, but will be put to the people of this country. A combination of the pragmatic approach as to what is in the best interests of this country and a

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democratic approach, which will put the issue before the people, provides the best of both worlds. That is in contrast to the positions offered by the opposition parties.

Mr. Malcolm Bruce (Gordon): Does the Secretary of State acknowledge that it is quite difficult to be dogmatic about a policy of dither and delay? The Government need to recognise that if Britain is to be a member of the European single currency, we must take practical steps now to achieve convergence and make the possibility of winning a referendum achievable. What is the Secretary of State doing to achieve that?

Dr. Reid: I have never had any difficulty in watching Liberal Democrats take a dogmatic approach to dither and delay. For many years, they have run on the slogan "What do we want? Gradual change. When do we want it? In due course". There is no difficulty in finding that to be so on the hon. Gentleman's part.

Our position is perfectly sensible and pragmatic. We believe that it is in the interests of this country that there is a general decision to join a successful single currency, but that that should take place in the right conditions and at the right time, which is why we have set out criteria. We believe that the decision should command the support of the Cabinet and Parliament, as well as the country, which is why we promised a referendum. Most people would agree with that common-sense and pragmatic approach, rather than the dogmatic position of Opposition parties.

Fuel Duties (Rural Areas)

2. Mr. David Stewart (Inverness, East, Nairn and Lochaber): What recent representations he has received on the impact of taxation on petrol on transport in Scottish rural areas. [130568]

7. Miss Anne McIntosh (Vale of York): If he will make a statement on the impact of vehicle fuel duties on the rural economy in Scotland. [130573]

The Minister of State, Scotland Office (Mr. Brian Wilson): I am in regular contact with all sections of the community in rural Scotland on a broad range of issues, including taxation on fuel.

Mr. Stewart: The Minister will be aware of the price of fuel in the highlands and islands which, at £4 a gallon, is an impediment to business and tourism. However, does he welcome the decision of Gleaner Oils to introduce LPG--liquefied petroleum gas--which costs half as much as ordinary fuel, into more than 20 filling stations in the highlands and islands over the next year? Does the Minister share my enthusiasm about LPG, and recognise that the next step involves, first, changing the conversion scheme to include older cars and, secondly, encouraging car manufacturers to build more dual-fuel vehicles? We will then have a low-emission, low-cost fuel that is available to a new generation of rural motorists.

Mr. Wilson: I am very enthusiastic about LPG, which carries with it the best hope of not just tinkering with the present situation but transforming it. It offers the glittering prize of changing the highlands and islands from the highest-cost road fuel area in the United Kingdom into

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the lowest-cost area. We can achieve that if we expand the availability of LPG. I am having very promising discussions about a major expansion of LPG availability in the highlands and islands, which would put the area into the forefront of access to the fuel in the UK. I am very much in line with my hon. Friend on that.

Miss McIntosh: Is the Minister aware that Scotland is still a major oil producer and has the second cheapest pre-tax oil prices in the European Union? However, post-tax, those prices are 23 per cent. higher than the EU average. Is the Minister also aware that last year the Highlands regional council did a study that showed that tanking up in the highlands and islands was £4.30 more expensive than in the rest of Scotland? Is it the Government's policy to price the car off the road in rural parts of Scotland?

Mr. Wilson: No, that is not our policy. As always in our debates, the hon. Lady's question suffers from her selective use of facts and statistics. She is right about the taxation burden on petrol, although her remarks are a bit rich coming from an Opposition Member, as it was the Tories, of course, who introduced the fuel duty escalator.

The hon. Lady did not mention other taxes on motorists which transform the picture across Europe, if one takes into account the whole burden of motoring taxation, not just petrol taxation. Is the hon. Lady proposing that there should be a purchase tax of £4,000 a car, as in Norway, or that road tax should be £720, as in the Netherlands? The whole picture has to be looked at and, in the highlands and islands, we are working on reducing differentials, supporting rural filling stations, supporting the initiative on bulk buying in remote communities and, of course, working on the LPG initiative. That is all constructive stuff which will bring benefit to the highlands.

Mr. Jimmy Hood (Clydesdale): Will my hon. Friend take care when others are trying to persuade him of the need for conversion to liquefied petroleum gas? We must first introduce proper regulation to keep the cowboys out of the conversion market. I have a constituent from Netherburn near Larkhall whose child was nearly gassed in the back of his car, but he cannot get compensation because there is not sufficient regulation to protect car drivers who choose to convert to LPG.

Mr. Wilson: My hon. Friend makes an important point, which I am sure he will pursue with his usual vigour. It does not detract from the overall point that LPG offers a major opportunity to transform motoring costs, and I urge people in the highlands and islands and other areas with LPG availability, particularly those who are buying a new car, seriously to consider purchasing a dual-fuel car.

Mr. Dominic Grieve (Beaconsfield): Madam Speaker, may I first associate Conservative Members with the remarks made by the Secretary of State at the beginning of Question Time in respect of your presiding over our turbulence?

In reply to the question from my hon. Friend the Member for Vale of York (Miss McIntosh), the Minister said that other factors should be considered in relation to the cost of transport in the highlands. Yet he knows that we have the highest heavy goods vehicle licence fees in

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Europe, on top of the fuel taxes and the fuel escalator that his Government have raised. The situation is so bad that the hon. Member for Western Isles (Mr. Macdonald) has had to introduce, through the Highland transport authority, an initiative for bulk buying petrol to try to reduce its price by 10p in the pound, although that is only a small component of the tax that the Government take. When will the Government wake up to the extent to which their taxation is bleeding the economy of rural areas in Scotland white?

Mr. Wilson: We enter the realms of the bizarre when a Tory spokesman assails us on the cost of petrol. The Tories, doubtless for what they saw as good reasons, introduced the fuel duty escalator; the Labour Government got rid of it. As the hon. Gentleman knows perfectly well, of the last 19p increase in the cost of petrol 17p per litre has come from the rise in the world price of oil, which in other ways is beneficial to the UK economy. Let us have some honesty on all points in the debate. We have listed our initiatives, and I am happy to associate myself with the creative thinking of my hon. Friend the Member for Western Isles (Mr. Macdonald) on bulk buying--that is what a good MP does, instead of bleating about things and trying to make political capital out of them.

Mr. Grieve: The Minister cannot get away with it. The Government have been indulging in the most extraordinary creative thinking to get themselves off the hook. First, they told us that the fuel duty escalator was all about changing our driving habits, which is a useless policy to present to the population of the highlands and islands. Recently, the Prime Minister has been telling us that the taxes are vital to pay for public services, but we in the House know the reality. In the Chancellor's constituency of Dunfermline, East--which is not exactly a hotbed of Conservatives or conservatism--43 per cent. of those polled consider that taxation has risen under this Government, and only 12 per cent. feel that they have received any benefit in the way of services for the price that they have had to pay.

Mr. Wilson: I can only describe that as unconvincing bluster. Let us establish the facts: the Tories introduced the fuel duty escalator; Labour has abolished it. That is an inescapable fact. Any hon. Member who says that we should cut fuel duty has to say where the money to do so will come from. Let us not forget that every one of the parties represented in the Chamber supported the fuel duty escalator in one way or another: the Tories introduced it, the Liberal Democrats wanted to increase it, and the nationalists based their budget projections on it. Where is the argument?

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