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House of Commons

Tuesday 14 November 2000

The House met at half-past Two o'clock


[Mr. 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 Tuesday 21 November.

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

Order for Second Reading read.

To be read a Second time on Tuesday 21 November.

Oral Answers to Questions


The Secretary of State was asked--

Rural Travel Costs

1. Mr. Malcolm Bruce (Gordon): If he will provide an additional allowance to those in receipt of income support in rural areas of Scotland to take account of the essential travel costs that they incur; and if he will make a statement. [136321]

The Minister of State, Scotland Office (Mr. Brian Wilson): No. The Government and the Scottish Executive have other measures in place to help rural areas.

Mr. Bruce: That is a rather disappointing if forthright answer. I remind the Minister of the first report of the Select Committee on Scottish Affairs which identified car ownership as essential even for poor people in rural areas, and transport as a specific problem. The Government have pursued a policy of consistently increasing transport costs across the board, applying the inflation addition only to the increase in benefits. Is it not time that representations were made to the Secretary of State for Social Security to review the extent to which that has increased poverty in rural Scotland?

Mr. Wilson: Before coming here, I took the precaution of checking on comparative petrol prices, and I was interested to learn that the Esso filling station in Inverurie, where the hon. Gentleman's face is undoubtedly well kent, is selling unleaded petrol at 81.9p a litre, which is exactly the same as in West Hampstead. Therefore, it is difficult to say that rural motoring costs are more

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expensive than urban motoring costs. I also note today that the Liberal Democrats in Anniesland are against means-testing for pensioners and those in receipt of other benefits. I cannot think of a more divisive piece of means-testing anywhere in the country than giving people on income support additional help with motoring costs while not giving it to those who are not.

Mr. Calum Macdonald (Western Isles): Does my hon. Friend agree that the Chancellor's package last week will make a big difference to rural motorists in my constituency and elsewhere? However, he will be aware that there is a big discrepancy in petrol pricing between my constituency and the rest of Scotland, a matter which is being investigated by the Office of Fair Trading. When will that report be finished, and will my hon. Friend undertake to take whatever action is recommended by the OFT as quickly as possible?

Mr. Wilson: I am well aware of that report, which I await with keen interest. My hon. Friend is right: there is a huge discrepancy in petrol prices within what is generically known as rural areas and, for instance, between the Western Isles and places such as Inverness and Inverurie. My primary concern in the matter is the genuinely peripheral areas where people are paying perhaps 10p a litre more than they are in what are sometimes called rural areas but which offer urban prices, and I want to tackle that differential. There is a real case for the OFT to investigate in the Western Isles, and I for one will be extremely curious to discover why filling stations with large volume turnover which are not paying a higher wholesale price than on the mainland are charging much higher retail prices.

Mrs. Margaret Ewing (Moray): I congratulate you on your appointment, Mr. Speaker, as this is the first time that I have been here since your elevation to your post.

Mr. Eric Forth (Bromley and Chislehurst): Oh really.

Mrs. Ewing: I am honest.

We have had endless reports about price differentials in rural areas from the OFT, the Highlands and Islands convention and the Highland council, yet the matter has not been effectively addressed despite what was said late last night in the House on the Energy Act 1976 and the reserve powers order. I also draw the hon. Gentleman's attention to the fact that the issue pertains particularly to those on low incomes, and those who want to go to the Benefits Agency to discuss the new deal are often deterred by the extensive costs that they have to pay to reach their destination.

Mr. Wilson: I agree with the hon. Lady's basic point. Through the new deal and other innovative approaches by the Employment Service and the Benefits Agency, help is available to people looking for jobs, and it is right that that should be so, whatever their specific needs and whether they are in rural or urban areas. If that helps people to obtain sustainable employment, that is a cost worth paying. Price differentials between areas need to be tackled, but we should not forget that taxation is the

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same throughout the country, so wherever else the differentials come from, they do not come through the tax system.

Mr. Russell Brown (Dumfries): My hon. Friend is fully aware that fuel costs impact not only on private motorists but on business. Within the past 60 days, however, it has been drawn to my attention that some small businesses, usually in the habit of receiving bulk deliveries, have found that a few companies have escalated fuel prices for them, and it is cheaper to buy fuel at local filling stations. Surely that merits an investigation into what those fuel companies are doing.

Mr. Wilson: It is certainly not part of my role to defend every action of the fuel companies. I shall be pleased to refer my hon. Friend's comments to the Department of Trade and Industry.

Mrs. Eleanor Laing (Epping Forest): It is interesting to hear the Minister avoiding the question again and again. I am not sure whether he has got his facts right about the filling station in Inverurie. I happen to know it well because my late grandmother-in-law used to own and operate it. [Laughter.] I do not see what is funny about that. She used to own it and serve the petrol there. If hon. Members had ever been to Inverurie, they would have seen her.

If the Minister accepts that petrol prices are an important part of essential travel costs in rural areas, why will the Government not listen to people who are suffering because we have the highest fuel tax in Europe, and cut fuel duty now? Is he proud of the fact that the Government have created in Scotland a level of rural poverty that we believed had been consigned to history?

Mr. Wilson: We have been waiting for some time to ascertain the Tories' remaining connections in Scotland. The hon. Lady had not previously struck me as a quine from Inverurie, but I am sure that she is proud of the designation. I received the figure from Inverurie shortly before lunch; unless a rapid price escalation has occurred in the meantime, my facts are right.

The hon. Lady said that we had the highest fuel taxation in Europe and she is right. However, she omits two salient facts. First, the proportion of the price of fuel that is taxation is significantly lower than when the Government came to power. We have reduced the proportion of tax in the cost of a litre of fuel.

The second fact is much more important. While our fuel taxation is high, a new study by Colin Buchanan and Partners has shown that our overall motoring taxation is below the median in Europe. In most countries, including France, Ireland and the Netherlands, motorists pay more in taxation although they do not pay so much of it at the pump.

Employment Trends

2. Mr. Nigel Griffiths (Edinburgh, South): If he will make a statement on employment trends in Scotland. [136322]

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The Secretary of State for Scotland (Dr. John Reid): Employment in Scotland is at record levels, with 2,376,000 people in work and an employment rate of 73.4 per cent. I do not have the breakdown of figures for Inverurie, but I can write to my hon. Friend if he wishes.

Mr. Griffiths: Will my right hon. Friend assure the House that he will continue to promote policies such as the new deal, which has helped 25,000 young Scots from welfare into work, and the working families tax credit, which helps up to 100,000 Scottish families? Will he decisively reject the Conservative party's policies to scrap the valuable allowances and schemes? Such policies would return us to the era of mass unemployment and despair. Will my right hon. Friend turn his back on that?

Dr. Reid: Yes, I can promise my hon. Friend that I will do that. I believe that we are beginning to benefit not only from the new deal but from the stable economic framework that the Government have created and that has resulted in the highest employment that we have ever had in Scotland and the lowest unemployment since 1976. It is worth emphasising that the reduction in unemployment is not only good in itself, but, along with the reduction in debt, allows us to put money towards vital services such as education, health and transport that are benefiting from the tough decisions that were taken. Rather than spending up to 50p in every pound of taxpayers' money on debt repayment and unemployment, we are allowed to put 83p of every pound towards vital public services.

Sir Robert Smith (West Aberdeenshire and Kincardine): Although I welcome the trend, I hope that the Secretary of State acknowledges that we must never become complacent, and that we must ensure that every possible job in Scotland is available. To that end, what role does the Secretary of State play in ensuring that the United Kingdom Government have a coherent policy on the dispersal of civil servants' jobs? Is he worried about the report in The Herald in Glasgow about the apparent decision of the Department for International Development not to locate jobs in Scotland because of the anxiety about the lack of a talented work force there? Will he ensure that his colleagues understand that Scotland is an excellent place in which to locate work and that it has a talented work force? Will he also ensure that the Government have a coherent strategy for dispersing civil servants' jobs?

Dr. Reid: I agree with the hon. Gentleman that the Government should, whenever possible, help to support British industry and disperse jobs. On dispersal of jobs to Scotland, the Department for International Development has as good a record as any other Department, or even a better one. As he will know, there is a major section of the DFID at East Kilbride. Moreover, thousands upon thousands of jobs in Scotland depend directly or indirectly on the Government and the civil service through Departments such as the Ministry of Defence. I am glad that the Government have been fighting to create jobs in the public and private sectors, such as with the recent decision to award a contract to the Govan shipyard, which can secure the future of that shipyard.

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Mr. David Marshall (Glasgow, Shettleston): The Secretary of State has probably just answered my question. I was going to ask him whether he agrees with me that one of the biggest boosts to employment in the Glasgow area has been the recent welcome decision by the Ministry of Defence to award a substantial order to BAE Systems in Govan. Will he join me in congratulating the work force on their valiant efforts to secure that vital order? Will he tell the House how many such contracts would come to Scotland if it were not part of the United Kingdom?

Dr. Reid: As my hon. Friend feels that I have already dealt with his first question, perhaps I should answer the second. In the unfortunate circumstance of an SNP- dominated, separate Scotland, very few people would be involved in building the three rowing boats that would presumably form the basis of the SNP navy sailing endlessly between Gourock and Dunoon to bring security to the people of Scotland.

On a more serious note, as my hon. Friend said we should congratulate the work force at Govan on their efforts, not least their recent work on the auxiliary oilers. I am glad that we have been able to assist, but no one should be under any illusions because this is an extremely competitive industry internationally. All British shipyards face great competition not only against each other but internationally. It is down to the workers and the management to win contracts, although the British Government will do whatever we can to assist British workers.

Mr. Eric Forth (Bromley and Chislehurst): Is the Secretary of State aware that unemployment levels in 15 English constituencies and 6 constituencies in London are higher than the highest in Scotland, which regrettably is, I believe, your constituency, Mr. Speaker? Does the Secretary of State attribute that to the enormous amount of public money that pours north from England to assist with the process? If so, what will he do to put that injustice right and to ensure that a proper amount of public money is spent south of the border to give us the benefits that Scotland has had?

Dr. Reid: I would be the first to accept that there are pockets of unemployment in England and in the London area that are as bad or worse than in many parts of Scotland. We have constantly made the point that the difference within regions is as big as the difference between regions. The right hon. Gentleman asks me to attribute blame for those circumstances. Without being churlish, I contend that the blame lies with 18 years of Conservative government.

It is a fact that in London, as throughout the United Kingdom, since this Government came in we have diminished greatly the level of unemployment. We now have the highest record of employment that we have ever had, and we have the lowest level of unemployment since the 1970s. That is because the Government have created a stable economic framework that enables the private sector to create jobs, and through the new deal the Government have given individuals the confidence and the initiative to take up those jobs. It is a pity that the right hon. Gentleman's party is committed to getting rid

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of schemes such as the new deal, which have done so much, and would unfortunately take us back to the boom and bust of the previous Tory Government.

Mr. John McFall (Dumbarton): To take up the theme of injustice, does the Secretary of State agree with me that one of the greatest injustices was the lack of a national minimum wage? Under this Government, more than 140,000 Scots earn at least £3.70 an hour, whereas in the days of the previous Government it did not matter to them that some people earned only 70p an hour.

Dr. Reid: I entirely agree. There were those on the Opposition Benches who predicted that if we introduced a decent minimum wage, we would lose hundreds of thousands of jobs. That has not happened. We have introduced a wage level below which people should not be forced to drop--it is the first time in British history that that has been the case--and, at the same time, created many thousands more jobs than would otherwise have been created. It is a pity, indeed a tragedy, that so many of the things that we are now able to build up because of the hard decisions that we made at an early stage would be abolished by a Conservative Government. I am thinking not just of the new deal, but of many of the benefits that we have been able to hand out to pensioners--including, of course, the winter fuel allowance.

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