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Mr. Francois: I would like to put on the record the fact that, as the hon. Member for Banff and Buchan (Mr. Salmond), with all his experience, will be well aware, we are lucky enough to have excellent Clerks in this place and they will always provide advice, including technical advice, on amendments. However, the responsibility for the amendment finally tabled is that of the Members who table it, not that of the Clerks. I hope that the hon. Gentleman will remember that.
Chris Huhne: I am grateful to the hon. Gentleman for making that point, as I am a new Member and certainly would not want to get the wrong side of the Clerks; in my experience, they have been extremely helpful with our drafting.
The more fundamental point that I wanted to make concerned not the forecast but the fact, which I think gives a hint of the populist nature of the new clause, that no mechanism is proposed for unwinding
Mr. Walker : I hold no brief for the Scottish National party, but it was a bit unfair to call its new clause opportunistic. The road haulage industry is in crisis. Not only do our hauliers have to contend with very high fuel prices, but they are being priced off European roads. There is also a massive driver shortage because the thresholds and costs of becoming a heavy goods vehicle or large goods vehicle driver has increased dramatically over the past three years. I believe that the industry's concerns are genuine.
Chris Huhne: I thank the hon. Gentleman for that intervention, but I did not say opportunisticI said populist, and I was about to explain why. The hon. Member for Bishop Auckland (Helen Goodman) earlier questioned whether the new clause was designed as a proposal to smooth particular changes in world oil markets. If so, it seems to me that it would be intellectually reputable and, perhaps with rather more detailed work on the drafting, it might command a substantial measure of support in the House. However, the reality is that the proposal operates only in one direction.
The question of whether we are dealing with a substantial secular change in the trend rather than a cyclical spike was asked earlier, but it was not answered and it really must be addressed. As I said, Liberal Democrat Members are sympathetic to the objectives, particularly in view of the problems of rural areas and of road hauliers. I am sure that the hon. Member for Banff and Buchan, with his expertise as an economist in the financial sector, will warm to another important objectivemacro-economic stability. I remember, as will he, the period between 1979 and 1981 when there was an oil price spike. The Conservative Government of the day substantially aggravated matters on the
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inflationary front and through the reduction of effective demand by doubling value added tax, thereby creating a far worse shock to the economy than was visited by the increase in oil prices itself. That shows the need for a wider debate.
As I say, I am sympathetic to the objectives and would not be at all surprised if Labour Members were, too, particularly on account of macro-economic stability. We must remember that, broadly speaking, the UK is in net balance on its oil account, so there is not the same need for a terms of trade change as there would be if we were a substantial net importer of oil. For all those reasons, I am sympathetic to the new clause, but I think that the practical issues remain substantial. It would be sensible to see how the proposal unwinds as well as the plus point of taking an increase off a particular spike.
My party is deeply concernedas, I hope, is the Scottish National party, particularly in a week when the G8 leaders are meeting at Gleneaglesabout the prospect of global warming and the need to maintain pressure over time for a gradual shift, which must not be too extreme, towards fuels and means of propulsion that do not have substantially damaging effects on the environment.
Mr. Mike Weir (Angus) (SNP): What the hon. Gentleman says about global warming is fine, but can he tell us the time scale? I represent a large rural constituency that, apart from one rail link on the coast, does not have any transport other than road. My constituents rely on rural transport, and rural businesseswhether coming in or out of the areaare suffering because of high fuel prices. If something is not done to help them now, they will not be here in 10 years time.
Chris Huhne: As I have said, I am completely sympathetic to the problems of road hauliers and other motorists in present circumstances. My party has set out various proposals for alleviating that difficulty, but I am dealing now with the specifics of the new clause and I have to say that, for the reasons that I have set out as a matter of principle and that the hon. Member for Rayleigh has provided as a matter of practicality, it will not deliver the objectives that we may well hold in common. I fear, therefore, that we cannot support new clause 7 because it has not been thought through in such a way as to deliver the objectives that we agree are necessary.
I am conscious of the need to move on, so I shall sum up by saying that if, in further conversations with the hon. Member for Banff and Buchan and his party, we can develop a proposal that would smooth matters and preserve the pressure to deal with the overwhelming problem of global warming, we should do so. However, I am afraid that this new clause does not do that.
: I am amazed by some of the contributions that we have just heard. I should say to the other Opposition parties that it is normal to allow the Financial Secretary to point out the defects in amendments and new clauses. That is what Ministers do, and they do it, incidentally, in response to Conservative and Liberal Democrat amendments. What is less clear is why the Conservative and Liberal Democrat spokespeople should spend their time on this
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matter, rather than confronting the essence of the issue. Perhaps the time spent in opposition has made them long to be on the Treasury Bench and, as a result, they have to take on some of the arguments that the Treasury put forward, rather than looking at the issue that concerns our constituents.
The Opposition's job is to make proposals in an effort to represent their constituents. The job of Opposition and constituency Members is to look for problems in our constituencies, and to try to do something about them. I should point out to the Conservative Front-Bench spokesman in particular that although my colleagues in the Democratic Unionist party and I do not agree on the future constitutional make-up of the United Kingdom, we do agree on the issue of serving our constituents. We are well aware that many of our constituents in Scotland and Northern Ireland have similar problemsas, indeed, they do in Wales and in many rural parts of England. I should point out to all Members of this House that in tabling and discussing amendments, it would be rather better to concentrate on their constituents' interests, instead of trying to make foolish debating points.
None of us is entirely clear whether the Conservatives are, in principle, in favour of our proposal, but it did not seem that way to judge by some of their Back Benchers' interventions. I am worried about the practical question of whether the principle behind the proposal also bothers them; more clarification on that point might be useful. Incidentally, the answer to the question that I asked the hon. Member for Rayleigh (Mr. Francois) is Brent "light". I do not think it a hugely significant problem to set a marker crude. Many of us have known about these matters for years, and it is as well before making pernickety points to be fully familiar with the subject that one is trying to debate.
Mr. Walker: I simply wanted to point out that I have some sympathy with the hon. Gentleman's concern for the haulage industry, of which I have had some experience in the past 10 years.
Mr. Salmond: I am prepared to exempt the hon. Gentleman entirely from my strictures. In fact, I was about to move on to a joint target of ours on the Liberal Democrat Front Bench.
To be accused of playing to the gallery by a political party that has specialised in putting the "moan" into sanctimony is absolutely extraordinary; as if the Liberal Democrats do not play to a political gallery! The only difference between the Scottish National Party and other parties supporting this new clause and the Liberal Democrats is that they play to different political galleries simultaneously in various parts of the country. So I advise them to try to found their opposition on something a bit more substantial than accusing their political opponents of playing to a political gallery.
Chris Huhne: Will the hon. Gentleman therefore describe how the proposed arrangements in the new clause would be unwound? What would happen if the price went in the other direction?
The new clause is about windfall gains and VAT. If the price is dropping, there are no windfall gains, so the new clause is not triggered. It is a one-way, modulating, smoothing clause.
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I forsake the Liberal Democrats in order to take on a trite point from Labour Members about whether a forecast already exists in the Red Book. Yes, we know that there is a forecastI have been debating it for many years with successive Chancellors of the Exchequer. But if a statutory mechanism is proposed, that forecast has to be in statute. If the Chancellor decided for some reason not to make the forecast, the rest of the provision would fall as a result. That is a reasonably obvious point. I know that the hon. Member for Eastleigh (Chris Huhne) is new to the House. If he ever makes a proposal similar to this one, he will find that he will also have to put the dependent mechanism into statute.
As has been said, the UK has the highest fuel taxes in Europe, especially for derv. For a variety of technical reasons to do with refineries, the price of derv is rising faster than the price of petrol in the oil market. The situation is very serious.
My hon. Friend the Member for Angus (Mr. Weir) said that his constituency has one rail line. Mine has none: there is not one metre of railway in Banff and Buchan, so there is no alternative to road haulage for the transport of goods to market. The high price of derv is very serious because it means that the percentage of goods being moved by UK hauliers is falling like a stone, as they cannot compete with their counterparts in other European countries. As my hon. Friend the Member for Dundee, East (Stewart Hosie) said, the number of bankruptcies in the haulage and transport industries is rising exponentially.
I have here a graph that explains the reality, and why the Scottish Nationalist, Plaid Cymru, Democratic Unionist and Ulster Unionist parties support this new clause. The highest fuel prices in this so-called "united" kingdom obtain in Northern Ireland, the highlands and islands of Scotland, rural Wales and parts of rural England. That is why we are pleading with the Government that something must be done.
The new clause is about windfall gains. The Red Book forecast an oil price of $40 a barrel. It estimated oil revenues from corporation tax and petroleum revenue tax at about $6 billion. The average price of Brent light so far this year has been $55 a barrel. The House of Commons Library puts the windfall gain for the Chancellor at £5 billion, if the price rise is maintained throughout the financial year.
The Chancellor has decided to forgo an increase in the fuel duty, at a cost of about £200 million. The additional mechanism suggested in the new clause would cost another £200 million, and be offset by the increase in VAT revenues. This new clause would have a modulating or smoothing effect. It asks the Treasury to give back a tiny proportion of its windfall gains from high oil prices to help hard-pressed people in our constituencies.
I have known the Financial Secretary for some years; he is one of the Government's more successful and able Ministers, and he has a lively and inventive mind.
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