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Mr. Francois: One or two road hauliers are active in my county of Essex and there are a number of farmers in my constituency. I think that we understand the spirit of what has been attempted in the new clause, but we are here to make law, and the law that we make must be operable. Part of the problem with subsection (1C) is that it is almost too complicated for its own good.
Mr. Nigel Dodds (Belfast, North) (DUP): The hon. Gentleman has drawn attention to difficulties in the specific terms of the new clause, but what is his party's view on the general principle—what the hon. Member for Dundee, East (Stewart Hosie) suggested was the spirit of the proposal?
Mr. Francois: I shall make our position fairly clear towards the end of my speech. I understand the hon. Gentleman's question, but I hope that he can be patient. Incidentally, we find it interesting that the new clause was tabled both by parties that are fierce defenders of the Union and by parties that are not so keen on it.
Subsection (1D) contains a potentially more powerful measure. It proposes that whenever international oil prices rise above the level estimated in the Budget—the formalised estimate proposed in subsection (1B)—indexed duty increases should be frozen until prices return to the forecast level. There are practical problems with that as well. First, there is the technical but nevertheless important question of how international oil prices will be defined for the operation of the clause. Will the definition depend on Brent light, West Texas intermediate, Dubai or some other representative basket of oil prices? If one is putting into law a trigger that affects the payment of duty, it is important to be clear on exactly the circumstances under which that duty would operate. I do not mean to steal the Financial Secretary's thunder, but I would not be surprised, as he is a Treasury Minister, if he had a similar view of those matters.
Mr. Alex Salmond (Banff and Buchan) (SNP): Will the hon. Gentleman give way?
Moreover, the adoption of new clause 7 as drafted—again, assuming that there is a formalised statement by the Chancellor—would provide an obvious incentive for a Chancellor to err on the side of caution in his supposed annual forecast of the likely oil price, no doubt mindful of seeking to protect revenue against the potential kicking-in of subsection (1D) over the course of the year in question. In theory, if the Chancellor must project for 12 months, he could reasonably be expected to make a
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conservative estimate of what that figure could be, because if subsection (1D) kicked in, the effect on the overall figures in the Red Book could be substantial.
Mr. Salmond: The hon. Gentleman made what he described as an important point about which crude would be the benchmark. He has already pointed out, however, that the Treasury makes a forecast of oil prices. Did his researches carry him as far as knowing on which crude that forecast is currently based?
Mr. Francois: The hon. Gentleman's party was among those that put forward the amendment and it is not my duty to explain his amendment to him, but his party's duty to explain it to the House. If I might say so, it could have done a better job of it.
Mr. Salmond: Will the hon. Gentleman give way?
We can see what the minor parties have been trying to achieve, but the mechanism, especially in subsection (1C), appears to be complicated in its potential implementation. We accept that high fuel prices pose a genuine problem—I am trying to answer the question of the hon. Member for Belfast, North (Mr. Dodds)—and that that is in large part because of the substantial proportion of duty that the United Kingdom pays, which is the highest in the EU.
Mr. Newmark : While I very much agree with the hon. Member for Dundee, East (Stewart Hosie) that we all have tremendous sympathy with road hauliers, of whom I have several in my constituency, all of us have motorists in our constituency. A bigger concern to motorists might be the Sustainable Development Commission with its plan to raise vehicle excise duties from £165 to £900 to £1,500 for the average family car. Strangely, that was not published until after the general election. Does my hon. Friend agree that that is a much bigger concern?
Madam Deputy Speaker (Sylvia Heal): Order. A bigger concern that might be, but I am afraid that it is wide of the new clause that we are discussing.
Mr. Francois: I do not mean to challenge you for one moment, Madam Deputy Speaker, but it is always nice to see a fellow Essex Member of Parliament chipping in to these debates.
We can see what the minor parties were seeking to achieve, and we acknowledge that high fuel prices pose a particular problem, which is caused mainly by the high level of duty.
Helen Goodman
: Did the hon. Gentleman hear the thoughtful speech by his right hon. Friend the Member for West Dorset (Mr. Letwin) last week on climate change, in which he suggested that in order for political parties to stop using fuel prices and other issues as a political football, such decisions should be neutralised by the setting up of an independent authority? What the
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hon. Gentleman is saying this afternoon does not seem wholly consistent with what his right hon. Friend was saying last week.
Mr. Francois: You have already chided the House, Madam Deputy Speaker, for straying slightly wide of the mark. Mindful of that, I think that I can say that the hon. Lady will be aware that there is a lively debate in the environmental community about climate change, nuclear power and other issues. As I hope she will appreciate, I am attempting to focus on the specific point about the value of duty and on exactly what is proposed in the new clause.
To summarise, we can see what the minor parties were trying to do, and we appreciate that there is a real issue with the level of duty, but the mechanism in the new clause, especially in subsection (1C), appears to be very complicated to implement. We therefore believe on balance that, unless there were a sudden massive external shock, rather than building the specific mechanism in the new clause it would be more appropriate to continue to monitor the oil price closely and take decisions on duty as part of the budgetary process in the normal way, as the Government did with their announcement yesterday. On that basis, we are unlikely to be able to support the amendment if it is pressed.
Chris Huhne : We approach the new clause with much sympathy with its objectives, but like the hon. Member for Rayleigh (Mr. Francois), we are somewhat sceptical about the practicalities. The proposals seem principally motivated by a certain playing to the public gallery, not least because the new clause calls for the publication of something that, to my certain knowledge, has been a regular part of every Red Book for many years. I must point out to the hon. Member for Dundee, East (Stewart Hosie) that he will find a fairly extensive discussion of the Chancellor's forecast in paragraph C49 on page 252 of the Red Book—and, indeed, a prediction by the Chancellor:
"Oil prices are expected to average $40.6 a barrel in 2005, in line with the average of independent forecasts."
That is, of course, an assumption audited by the National Audit Office.
Mr. Salmond: Yes, but it is not a statutory obligation, and if we are proposing a statutory new clause to do something we cannot leave it to the discretion of the Chancellor whether he does or does not publish a forecast. Does the hon. Gentleman now understand why the requirement has to be in the new clause?
Chris Huhne: I am grateful for that clarification, but it would be very odd if the new clause required the Chancellor to do something if it were not implicit that he is already doing it, and the forecast is already there. I am not sure that we need the belt-and-braces approach that the hon. Gentleman suggests.
Mr. Salmond: I am sure that the hon. Gentleman is not presuming to know more about the drafting of new clauses than is available to all Members through the excellent expertise of the Clerks of the House. Or does he think that he knows more than them?
Chris Huhne:
I am sure that I would defer to the Clerks in that matter—but I come back to the point that
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nowhere in the presentation by the hon. Member for Dundee, East or in what was said by the hon. Member for Banff and Buchan (Mr. Salmond) has there been any awareness that the information is regularly published; certainly, neither of them drew attention to the fact in much detail.
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