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House of Commons

Tuesday 29 June 2004

The House met at half-past Eleven o'clock

PRAYERS

[Mr. Speaker in the Chair]

PRIVATE BUSINESS

Medway Council Bill

Considered; to be read the Third time.

Oral Answers to Questions

SCOTLAND

The Secretary of State was asked—

Road Fuel Taxation

1. Andrew Selous (South-West Bedfordshire) (Con): When he last met the Chancellor of the Exchequer to discuss the effects of road fuel taxation on business in Scotland. [180229]

The Secretary of State for Scotland (Mr. Alistair Darling): I have regular discussions with my right hon. Friend on a wide range of issues.

Andrew Selous: The respective pre-pump prices, excluding taxes and duties, of unleaded petrol and ultra-low sulphur diesel are 20p and 21p. Last year, the Chancellor said that he would not proceed with fuel duty rate increases if the international oil situation remained volatile. What hope can the Secretary of State give to hauliers and motorists in Scotland and throughout the UK that the Chancellor will keep his word?

Mr. Darling: The hon. Gentleman has picked his day carefully—today, oil prices have fallen to a two-month low following the handover of sovereignty in Iraq. Oil prices are currently volatile and high because of a combination of factors, including not only uncertainty in Iraq and the middle east, but increased demand from the United States, China and other countries. The Chancellor has said that he will examine oil prices and review the situation in August.

Conservative Members should concentrate on why petrol prices have increased, which is because of oil prices rather than sudden increases in duty. We must wait and see what happens in the summer, but the Government's action in encouraging the Organisation of Petroleum Exporting Countries to increase
 
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production, coupled with the progress that we have made in Iraq, is helping to exert downward pressure on oil prices, which in turn will help pump prices.

Mr. John McFall (Dumbarton) (Lab/Co-op): The Government have cut the fuel tax escalator that the previous Government imposed. Does the Secretary of State accept that environmental issues such as climate change are important and that a sensitive balance must be reached? Those who fought against protestors in the late 1980s are now inciting people needlessly to riot, which is a sorry sight.

Mr. Darling: My hon. Friend is right that one must take a wide range of issues into account in considering the taxation of fuel. A few weeks ago, the Conservative party showed its opportunism at its worst: instead of joining others in encouraging OPEC to increase oil production, it made opportunistic demands, but Conservative Members know that they would take a completely different view if they were in government.

Mr. Peter Duncan (Galloway and Upper Nithsdale) (Con): The Prime Minister has indicated that the Government will review September's proposed 2p rise in fuel tax in August. Just so that ordinary Scots know how strong their voice is in Cabinet, are there any circumstances in which the Secretary of State would intervene and advocate abandoning that tax hike? Today's press says that desks are being thumped throughout Downing street; are there any circumstances in which the Secretary of State would thump his desk?

Mr. Darling: In our Department, desks are not thumped—they are too valuable. Just as I am determined to bear down on the Scotland Office's hospitality budget, I will not rack up bills by damaging my desk. People, whether they are hauliers or motorists, are, of course, concerned about fuel prices, but it is important to concentrate on the causes of the oil price increase, which, as I said, are increased demand from certain parts of the world and events in Iraq and the middle east. I recognise that we have a long way to go, but the recent fall in oil prices is welcome. Brent crude is currently trading at just more than $33 a barrel, which is much better than a few weeks ago. The Chancellor has said that he will keep the situation under review and, as he indicated earlier this year, he will make a decision in August.

Jim Sheridan (West Renfrewshire) (Lab): My right hon. Friend will be aware of the threatened protests throughout Scotland should fuel tax increase. Will he assure the House that those protestors will face the same level of law enforcement that trade unionists faced when they defended their communities in the 1980s?

Mr. Darling: It is important that anyone who demonstrates abides by the law and does what they are asked to do by the police and other authorities. Of course people have a right to object, but they must do so within the framework of the law.

John Thurso (Caithness, Sutherland and Easter Ross) (LD): In my constituency and in many other remote rural areas where road transport is a necessity, fuel
 
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costs, on average, 10p more than it does in urban areas such as Inverness and Edinburgh. Is the Secretary of State aware that EC directives 92/81 and 92/82 contain derogations to allow for lower tax to cover precisely that situation? Why do not the Government act to end that penalty in remote areas, and what is his Department doing to persuade the Treasury to that end?

Mr. Darling: The Liberals always give the impression that they want fuel prices to go up for environmental reasons—except, of course, in their own constituencies. As for the hon. Gentleman's proposal, it would give rise to difficulties were the Government to decide that fuel tax should be lower in one area than another. There will always be an argument about where the line is drawn. The hon. Gentleman's proposition is not practical, and were we to act on it I suspect that he would be the first to complain about where the line was drawn.

Pete Wishart (North Tayside) (SNP): Despite today's welcome news about oil prices, 77 per cent. of the price of a litre of fuel is still taken up by taxes and duties. Does the Secretary of State think that that figure is too high or too low, and does he think that there could still be a case for a further 2p hike in fuel prices for Scottish motorists?

Mr. Darling: As I said, the Government's position is that we are keeping the situation under review and the Chancellor will make his decision in August. That seems to me to be the right way to approach these matters.

Proceeds of Crime Act

2. Mr. Russell Brown (Dumfries) (Lab): What discussions he has had with the First Minister about returning cash seized under the Proceeds of Crime Act 2002 to local communities worst affected by the criminals. [180230]

The Secretary of State for Scotland (Mr. Alistair Darling): As my hon. Friend will know, that is a matter for the Scottish Executive, but I know that they are determined that recovered criminal assets must be used to benefit the communities that suffer from drug dealing.

Mr. Brown: I thank my right hon. Friend for his response. About 50 per cent. of all assets seized in Scotland have been seized through the good work of Dumfries and Galloway constabulary, which also led to the largest ever UK seizure through the civil recovery aspect of the Act. I appreciate that this is a matter for the Scottish Executive; nevertheless, when my right hon. Friend speaks to the First Minister will he impress upon him that some of that money must find its way back to the local communities that have been so badly damaged through criminal activities, and especially drug dealing which is rife in many parts of the country?

Mr. Darling: I am aware of the seizures that have taken place in the south-west of Scotland and my hon. Friend is right to pay tribute to the chief constable and his police force in Dumfries and Galloway. For many years—indeed, ever since he has been the Member for Dumfries—my hon. Friend has expressed his concern about the impact of drug dealing on communities. Of
 
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course, I talk to the First Minister about such matters. It is difficult to have an exact correlation between where the money is seized and where it is paid back, because the place where it is seized may not be the scene where so many crimes have been committed and communities have suffered. The Scottish Executive is talking to the Treasury about the exact percentage that is retained and repaid. The general principle of the legislation is absolutely right, and it is a great pity that Opposition Members were so reluctant to support us.

Mr. Ian Davidson (Glasgow, Pollok) (Lab/Co-op): Notwithstanding the fact that many of these responsibilities lie with the Scottish Executive, this House has responsibility for regulating and dealing with professionals. Given that the amount of money that has been seized is lower than might have been expected, what steps is my right hon. Friend taking to deal with professional associations representing accountants, bankers and lawyers, which often act to assist criminals by hiding their assets and preventing their being seized?

Mr. Darling: I am tempted to declare an interest, but it has, sadly, been some years since I practised, although the register shows that I am still a member of the Faculty of Advocates. I am still practising politics, however.

My hon. Friend makes an important point. As he will know, my right hon. Friend the Home Secretary is considering various measures to attempt to deal with some of the problems that he highlights. There is a balance to be struck between maintaining confidentiality between clients and professionals and dealing with situations involving abuse of the system.

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