Previous Section Index Home Page

Mr. Carmichael: The hon. Gentleman’s anxiety always causes me anxiety. Indeed, I took a similar view to those on the Front Bench until I joined my own. Measures beyond number have been introduced in the House, both by the present Government and by Conservative Governments, without an exact financial quantification. We have proposed a principle to deal with a problem that causes serious economic and social hardship. As is often the case in the House, we should allow the details to follow later. Accepting the proposal commits the Government to nothing. It is an enabling measure, rather than a prescriptive one, that gives them the power to deal with the problem. I have lost count of
4 July 2006 : Column 746
the number of occasions in Committee and on Report when the Government have proposed such enabling measures and said, “Trust us—we’ll deal with this later.” We are giving a power to the Government, and we are prepared to trust them to do the work and bring the figures to the House at a later stage.

The proposal introduced by my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey is necessary. As he has pointed out, people using the cheapest petrol pumps in my constituency pay about 105p per litre. In the remoter parts—the outlying parishes in Orkney and in Shetland, and the outer islands away from the mainland of Orkney and Shetland—the price is much higher than that. When I was first elected in 2001, people in Hoy in Orkney were already paying more than £1 per litre. That causes real financial difficulty.

8.30 pm

Many of the people living in those communities are on low and fixed incomes. They do not have public transport running at the bottom of their road every five or 10 minutes. They have to use a private car because they have no option. The Government take in the form of value added tax, quite apart from the fuel duty, hits those people particularly hard because they start from a lower income and pay more.

In the villages and towns in my constituency, petrol is sold from small petrol pumps and shops that do not have the purchasing power of Asda, Tesco and other big suppliers in the towns and cities. That is the root of the problem. The Treasury has come up with all sorts of answers. It has told us that we cannot introduce such a measure because people will drive from areas where they already get cheap petrol to areas such as those represented by my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey—my goodness, I wish he had a shorter constituency name—simply to get petrol that they could buy, at best at the same price, and probably cheaper, if they stayed at home. The logic of such objections does not bear rational examination.

Sir Robert Smith: The converse, which the Treasury does not seem to accept, is that under our proposal, people will stay in the local community and buy their fuel locally without making the extra journey to another area, which will keep the local economy more buoyant and reduce the travel time and the amount of fuel that they consume.

Mr. Carmichael: Indeed. That is the point that I made in an intervention on my hon. Friend the Member for Inverness and all the heathery bits.

Rob Marris: On the figures, new clause 4 is an enabling clause which, if passed, would enable a lower rate to be set for excise duty on fuel. Approaching it from the other end, in terms of forgone tax revenue, how much does the hon. Gentleman think the Treasury should spend on the measure? He could give us that figure and from it one could work out, in terms of the number of litres sold in remote rural areas and so on, what the discount on fuel would be. How much does he think the measure should cost?

4 July 2006 : Column 747

Mr. Carmichael: The hon. Gentleman is inviting me to speculate on any number of ifs, buts and maybes that might start with the cost of oil on the world markets, go to the level of fuel duty, and from there to the rate of value added tax. The answer to him is the same as it was to the hon. Member for Wycombe: it depends on the figures that the Treasury is able to produce at the time.

What we want to hear today from the Financial Secretary is that at last he is prepared to take seriously the fact that there is a problem which causes real hardship to individuals and to businesses in my constituency and in many others represented in the House. Rather than spending all their time and energy producing excuses for not implementing such a measure, let his civil servants recognise the problem, examine it and act, otherwise the situation will never improve and the sustainability of our communities will never be maintained.

Julia Goldsworthy: The passion with which my hon. Friends have spoken is an indication of how strongly they feel about the issue. We are trying to get recognition of the problem. All our constituents will be disappointed by the responses from those on the Conservative Benches. We are raising the issue again because of the importance that we attach to it. We want to open up a constructive debate and discuss the issue in the context of measures to persuade people who are able to change their behaviour to behave in a more environmentally friendly way, while not penalising those who have no other options. We are disappointed that hon. Members on both sides of the House are trying to close down such a debate.

Mr. Andrew Turner: When one wants a constructive debate to take place, one starts by providing information. It would not have been difficult for the Liberal Democrats to ask questions, table questions to Ministers, seek the advice of civil servants and ask their research assistants to do some work in the Library to formulate a range of options, as my local authority did when we took control from the Liberal Democrats and introduced a 50p bus fare for every person under the age of 19 on the island to travel anywhere on the island. That was done before we took control. The Liberal Democrats have ample facilities, as have all of us in the House—I can see, Mr. Deputy Speaker, that you want me to shut up—to undertake that work. I wish they had done so, because they would be taken more seriously.

Julia Goldsworthy: If the hon. Gentleman has such resources at his fingertips, he could have raised the issue himself. If the communities that my hon. Friends described had access to buses, they would happily provide subsidised fares, but for many of those communities there are no bus services and to provide them would be worse for the environment. An equivalent service to the one in the hon. Gentleman’s constituency could not be provided.

I draw the hon. Gentleman’s attention to the comments made to those on his Front Bench in the discussion of minimum pensions income. His Front-Bench team will remind him of why it is not possible to give detailed information. The reason why we refer to
4 July 2006 : Column 748
Treasury regulations is that there is no UK definition of a remote rural area. There are definitions that apply to England and Wales, but if those were mentioned in the new clauses and amendments, they would not include Scotland. My hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) is therefore trying to produce enabling measures in order to provoke a debate. Transport costs alone make fuel significantly more expensive in the highlands than in more densely populated parts of the UK. We are trying to respond to problems experienced across the country. All the amendments and new clauses in the group try to deal with those problems in different ways.

One solution would be to more forward more quickly on road user charging, which would be a more flexible way of discouraging car journeys in congested areas, which cause the most pollution, while not penalising those who do not generate congestion and who do not have access to public transport alternatives. If the Minister can tell us that the Government intend to push forward on such a long-term policy, we would welcome it, and we would welcome a time scale.

Costs are much higher in rural areas and there is no immediate solution. The 2003 national travel survey for England showed that half the residents in rural settlements of fewer than 3,000 people lived within 30 minutes’ walk of a bus stop. That compares with 95 per cent. of people living in larger urban areas. I am sure that in many parts of the constituency of my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey people will have an even longer walk.

Those rural residents are likely to spend more per week on transport than their urban counterparts. The expenditure and food survey for 2002-03 showed that households in rural areas with a population of fewer than 3,000 spent more than £70 a week on transport, compared with £45.50 for those living in urban areas. Half their expenditure goes in operating costs, a large proportion of which is the cost of fuel.

New clause 4 seeks to lower the rate of duty in remote areas, as defined by the Treasury, and would give the Government the powers to apply for a derogation from the energy products directive, as has recently been successfully undertaken by the French Government. I understand that that was unanimously approved by the EU, as was referred to earlier, which means that it must have had the support of the UK Government. Why does the Minister think that remote and rural areas in the UK do not fulfil the same objective socio-economic conditions as the regions in which the derogation is applied in France?

Because of the lack of transport alternatives, consumers are unable to respond to price incentives. They just have to bear the higher cost, since there will be no cheaper alternative. Hence this proposal is logical and fair, not least because incomes also tend to be lower in more isolated and often more economically deprived constituencies. Although I represent a constituency at the opposite end of the UK to that of my hon. Friend, many of the experiences and difficulties that he has described are familiar to me and my constituents.

The amendments tabled in my name seek to achieve similar ends to the new clause, but I am not proposing that both alternatives should be put forward
4 July 2006 : Column 749
simultaneously. As I have said, we seek to propose a range of alternatives to highlight the situation and provide the Government with a range of approaches. We know that the alternative proposed by my hon. Friend works because it has been applied in other countries. Unfortunately, because all our amendments have not been selected we will not be able to vote on the whole package that we have proposed, so I hope that my hon. Friend will press his new clause to allow the Treasury at least to consider the issues.

The fundamental reason for providing such a concession in my amendments is to recognise the high cost of travel in rural areas. They allow for the revalorisation of fuel duty to continue. We welcomed that when the Chancellor announced it in the Budget. If that continues, and if it is the Government’s intention to increase the share of green taxation as a proportion of the total tax take, it will be those people whose behaviour will not be affected by the increases who will have to bear the costs. Therefore, we seek some way of offsetting those costs for people who cannot change their behaviour.

I draw the Minister’s attention to two issues. The first is the extent to which the differential for the new highest band, which the Chancellor announced in the Budget, will impact on behaviour, and how it will encourage more environmentally responsible choices. In his Budget speech, the Chancellor said:

In a written answer the Financial Secretary gave the number of people who would be persuaded by that amazing new band to change their behaviour. As a result of these proposals, carbon emissions will fall by a fraction—less than 1 per cent. Therefore, our amendments seek to point out the incredibly limited impact that the Government’s proposals will have and to present ways in which they might like to achieve a more significant impact on behaviour. In this respect, people in rural areas, as well as in urban areas, will have the opportunity to exercise choice to offset those costs. When they are purchasing a new car they can decide, like people in urban areas, to buy a car with lower emissions. However, they cannot decide how much they pay for their fuel. That is the inequality that we seek to address.

I hope that the Government will at least recognise some of the difficult circumstances that many of my constituents and those of my hon. Friend and others in rural areas across the country face, and I hope that they are prepared to take on board the need to recognise their difficult circumstances. If the Minister does not wish to accept any of our proposals, I would be interested to hear how he plans to ensure that people in rural areas are protected from any further measures that the Government may plan to take in relation to fuel duty and vehicle excise duty that will significantly increase their transport costs despite the fact that ultimately they will have no alternative to the car and hence will have to bear those costs rather than change their behaviour to the benefit of the environment.

4 July 2006 : Column 750

Rob Marris: I have to say that we are having a somewhat confused debate. The proponents of the motor fuel— [ Interruption. ] I want to offer some clarity to the hon. Member for Eastleigh (Chris Huhne), which Members of his party have signally failed to do. I will not address any remarks to new clause 6, but I shall speak to new clause 4 and the amendments. The hon. Member for Wycombe (Mr. Goodman) gave an interesting figure. He will correct me if I am wrong, but I think that he said that 29 per cent. of the population would be in a rural area.

8.45 pm

Mr. Paul Goodman: It depends— [Laughter.] It depends on which of the two definitions of rural area one accepts. The Liberal Democrats have not been able to tell us which of the two they accept, so when they laughed, they were laughing at themselves.

Rob Marris: It will not surprise the hon. Gentleman to learn that I entirely agree, because I was using the only figure that has been cited in the debate, so far as I am aware.

Danny Alexander: The new clause makes it clear that the definition should be subject to Treasury regulations, but in answer to an earlier intervention I mentioned the Scottish Executive’s rural petrol stations grant scheme as a model that might be worth considering. The definition used in that scheme would apply to 5.37 per cent. of the population of Scotland. I hope that that point at least manages to inform the hon. Gentleman on one particular possibility that might well be adopted when the Treasury or civil servants come to look at this matter, because I am sure that his party will support the new clause.

Rob Marris: I am glad that the hon. Gentleman has come up with a figure, but for the moment I shall stick with the figure on which I have based my calculations, as it was the only one before us before that intervention.

There are approximately 20 million private motor cars on United Kingdom roads. I estimate that the average rate of vehicle excise duty is £150 a vehicle, based on clause 13. That would generate vehicle excise duty of approximately £3 billion a year. If we take 29 per cent. of that, that means that the Liberal Democrats are proposing, in round terms, an almost £1 billion giveaway.

Chris Huhne (Eastleigh) (LD): It was made clear that the 29 per cent. figure referred only to Scotland, which represents a small proportion of the total UK. The hon. Gentleman cannot take the total UK car stock and then extrapolate from the Scottish proportion. As we have discussed in previous debates, the Countryside Agency uses a more robust definition of rurality that applies to England and Wales. This point highlights why it is important to give the Treasury the option through regulations to establish a definition that applies to the length of the UK. However, the hon. Gentleman cannot extrapolate in the way that he has.

4 July 2006 : Column 751

Rob Marris: I apologise to the hon. Gentleman. I thought that his colleagues were moving an amendment to the Bill that would cover the whole of the UK, as provisions on vehicle excise do. Therefore, I based my calculations on the whole of the UK, and at least I have the guts to put forward some figures, which thus far he and his hon. Friends have not done. They are talking about a giveaway of approximately £1 billion, based on the 29 per cent. cited by the hon. Member for Wycombe. If we use the figure of 5.4 per cent., the giveaway is about £150 million—it is difficult for me to do that calculation in my head. They should at least put forward some figures.

Let us look at new clause 4. The hon. Member for Orkney and Shetland (Mr. Carmichael) did not seem to understand the mathematics of what I put forward in my intervention, so I am having to make a speech. New clause 4 would give the Treasury some power, but the hon. Members who support it will not indicate any way in which that power might be exercised, so I will make a suggestion. If they do not like the figures, they can come up with others. That way, at least we will then have some figures before us in this debate.

Page 13 of the Red Book tells us that excise duties in the UK raise £40 billion a year. If half of that comes from vehicles—excise duties come in from other sources, too—the amount is £20 billion. I suspect that I am making a conservative estimate of the proportion of excise duties that come from vehicles, but I will use it. If we take off the figure that I gave earlier as an estimate of the total UK vehicle duty, which was £3.3 billion a year, based on 20 million private vehicles and with an average excise tax disc duty of £150, that leaves us with £16.7 billion coming principally from fuel, and 29 per cent. of that is about £5 billion. New clause 4 does not give us any formula for by how much its supporters wish vehicle excise duty to be cut, but if it were cut by 50 per cent. in rural areas, that would amount to a £2.5 billion giveaway. On the only figures before us—others can put forward their own figures—these amendments would provide for a tax giveaway of getting on for £2.5 billion to £3.5 billion. That is a great deal of money. It is being said, cavalierly, “We cannot put any price on this. We have not looked at the figures and it is all up to the Treasury.” That is irresponsible in a debate on the Finance Bill. As ever, the Liberal Democrats are under-prepared. They have not done their homework.

Julia Goldsworthy: I was talking about some of the difficulties that people in remote rural areas may face when considering their transport options.

Rob Marris: Of course there are difficulties for people in remote rural areas. However, if we consider wealth generation in the UK, it comes principally from urban areas, especially London, where we are now situated, and the south-east. I represent a constituency in the west midlands.

A principled position is being put forward about helping people with their travel costs in remote rural areas. I understand that. However, Liberal Democrat Members refuse to set out any figures because they have not done their homework. The hon. Member for Falmouth and Camborne (Julia Goldsworthy)—she will correct me if I am wrong—has a reputation for
4 July 2006 : Column 752
bunking off from this place to go on sports programmes on television, and helicoptering around the United Kingdom. She then comes forward as a proponent of green taxes. In addition, she comes forward with vehicle excise duty proposals in amendments Nos. 124 and 129, which would cut vehicle excise duty and cut also green taxes. It is the most brass neck that I have seen in five years in the Chamber.

Mr. Carmichael: Perhaps the hon. Gentleman is a little jealous that no one has invited him on to such a programme.

Rob Marris: Were I to be invited on to such a programme, I would not participate. That is because I do not believe in moonlighting. I gave up my practice as a solicitor—where I made more money than I do in this Chamber—as soon as I was elected.

Julia Goldsworthy: I am sure that the hon. Gentleman would approve of the worthy cause—the money raised for charity, and the fee that I received from it, was donated to the Cornwall air ambulance, which is funded entirely from charitable donations and provides an essential service—

Mr. Deputy Speaker: Order. I think that it would be a good idea if we returned to the new clause that is before the House.

Rob Marris: I will do that, Mr. Deputy Speaker.

It just seems to me that helicoptering around the United Kingdom and then proposing green taxes in the proposals that are before us, which go against green taxes, is the height of hypocrisy and brass neck. On that basis, if on no other, I urge Government Members to vote against the proposal if there is a Division.

Stewart Hosie: I shall speak primarily to new clause 6, but I shall take up some points that arise from new clause 4.

The hon. Member for Falmouth and Camborne (Julia Goldsworthy) said that she was delighted to raise these matters again—I am paraphrasing—so as to spark debate. I was intrigued by the use of the word “again”. When we discussed a similar amendment last year, the Liberals opposed it. When we discussed these matters generally on the Floor of the House, the Liberals—

Chris Huhne: Ah ha.

Stewart Hosie: I think that I can finish the sentence without a strange Liberal “Ah”.

To come to the substance of the matter, in Committee on the Floor of the House, the Liberals, understandably because it is their policy, concentrated on vehicle excise duty rather than on fuel duty, an issue that was raised elsewhere.

Next Section Index Home Page