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Mr. Newmark: If the hon. Gentleman will sit down, I shall make my point clear. I understand the problems faced by people in remote areas. I know that life there can be more expensive, but the same is true even in my semi-rural area. For example, people who live 15 miles away from the centre of Braintree have to pay higher fuel prices, for some strange reason. In those circumstances, how do we define remote? Various definitions have been offered in the debate so far. People in Caithness, Sutherland and Easter Ross are said to live in a remote area, and the hon. Member for
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Argyll and Brute—Bute, rather—said that people on the islands inhabit an even more remote area. However, people living in central London might regard Bromley and Chislehurst as remote.

Mr. Andrew Turner: Only the Labour ones.

Mr. Newmark: It is even more remote for the Liberal Democrats now. We will never be able to define what is remote and what is not. Who will play Solomon in respect of that very difficult question?

Sir Robert Smith: Why does the hon. Gentleman think that the UK is so feeble in its inability to understand the problems of remote rural areas, when Greece, Portugal and France understand them perfectly well?

Mr. Newmark: People define what they perceive as remote in their own way. The Liberal Democrats are not approaching the matter in the right way.

I turn now to the question of cost. Liberal Democrat Front-Bench Members told us that they had no idea of how much their proposal would cost. What a surprise—but then the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) came to the rescue and got his calculator out. He said that the cost could be £3 million or £10 million or £20 million. Are there any higher bids? Once again, the Liberal Democrats have not thought out the costs of their proposals at all.

Julia Goldsworthy: Will the hon. Gentleman concede that new clause is purely an enabling provision and so has no cost implications? Given that that is so, why does he think that the Government should choose to reject it?

Mr. Newmark: Call me a simple soul, but new clause 4 does imply a cost. I shall not rehearse the arguments offered by hon. Members on the Liberal Democrat Front Bench, but I am sure that they will back me up when I say that their proposal does represent a cost to the Exchequer.

John Thurso: Will the hon. Gentleman give way?

Mr. Newmark: Is the hon. Gentleman going to get his calculator out again?

John Thurso: I have no idea how to work a calculator. I was quoting from a report. The figure of £3.5 million that I gave pertained to the highlands, and was a maximum. For the benefit of the House, I extrapolated what that might be as a maximum for the UK. If the hon. Gentleman reads Hansard, he will find that what he said about my remarks is wrong.

Mr. Newmark: I should be surprised to find that what I said is wrong. Unless the hon. Gentleman produces a definition of what is remote, I do not know how he can come up with a figure of £20 million in his analysis.

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I turn now to new clause 6, which would require the Chancellor to forecast oil prices. I cannot pretend that the right hon. Gentleman has any greater forecasting powers than Mystic Meg, and there is no evidence that his skills in that respect have been especially good in the past. It is ludicrous to expect the Chancellor to provide a forecast of oil prices. We should all be multimillionaires by now, especially the right hon. Gentleman, if we could actually forecast the price of oil over the next 12 months.

If the Lib Dems want to show their true green credentials, they should be figuring out a way to tax carbon emissions. How can one do that? I do not want to digress from the new clauses, but focusing on carbon emissions and charges on them, perhaps through vehicle excise duty—although not the modest premium added by the Chancellor—and seriously charging Chelsea tractors that emit huge amounts of carbon would have been a far more sensible way forward.

John Healey: We have had a lengthy debate on these proposals: nine speeches and four interventions. Clearly, the Chamber is not full of German and Italian football fans, but for those who have a passing interest, the score is still 0-0 after 65 minutes. However, I am told that it is an excellent game.

The hon. Members for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) and for Dundee, East (Stewart Hosie) introduced their new clauses in measured tones, but that did not disguise the flaws in their arguments. The hon. Member for Inverness, Nairn, Badenoch and Strathspey, who moved new clause 4, laid great stress on the price of fuel for those living in rural areas in his constituency, but it is important to remember that the costs of fuel and vehicle excise duty are just two of the many factors that contribute to the costs of motoring and the cost of living.

The cost of living varies from region to region across the country. The hon. Gentleman may like to consult the recent regional comparisons of the retail prices index published by the Office for National Statistics. The RPI for Scotland is 5.5 per cent. lower than the UK average, while the RPI for London is 9.7 per cent. above the UK average. The price of a pint of beer in London is significantly higher than elsewhere in the country, but we do not make tax adjustments to compensate for that.

Mr. Carmichael: Surely the hon. Gentleman accepts that the RPI is not uniform across Scotland as a whole. There are variations in significant price indicators in different parts of the country. It is much lower in places such as Glasgow and Edinburgh than in the remote rural areas that we have been discussing tonight.

John Healey: My point is that the cost of living and its components vary. Where the cost of a particular commodity is high, we do not necessarily compensate by making the sort of tax adjustments that the hon. Gentleman and his hon. Friends are advocating.

Danny Alexander: As the Minister knows from my earlier remarks, the reason for our proposals is that in
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rural areas, especially where there is no access to public transport, getting around by car is a necessity, not a choice. It is not a consumer choice in the way that going for a pint of beer in a London pub might be; it is essential for the future economic viability of rural communities. That is why there is a special case to be made.

John Healey: The Government recognise that, which is why we introduced the special rural transport fund to support the pressures and needs of rural transport. The hon. Gentleman may be interested in the fact that spending per head on transport in Scotland is 29 per cent. higher than in the rest of the UK.

My hon. Friend the Member for Wolverhampton, South-West (Rob Marris) raised a couple of important points, one of which links to the point that I made just now and which he tempted me to make when he intervened. He said that, if the principle of uniform tax rates were changed, allocations for public expenditure would, inevitably, have to be reviewed, too. When that point was put to the hon. Member for Inverness, Nairn, Badenoch and Strathspey he said no, point blank. On that question, the Liberals want to have their cake and eat it.

The second major flaw in the proposal is that it is in conflict with the environmental objectives that we can pursue through vehicle excise duty and fuel duty. Clearly, the importance of environmental objectives applies equally to those who live in rural areas. If we follow the logic of the Liberal proposal, the cost of going green is not borne equally by everyone but borne in particular by those who do not happen to live in rural areas. Our policy on fuel duty is well established. The duty rates should rise each year at least in line with inflation, as we seek both to meet our targets to fund essential public services and our obligations to tackle climate change.

9.30 pm

Julia Goldsworthy: If the Financial Secretary’s view is so strong on national fuel duty rates, why did the Government support the derogation for France?

John Healey: Let me correct the hon. Lady. She will be well aware that the UK’s policy is not to interfere in the fiscal decisions of other member states. We therefore did not support the French, but we did not oppose them, when they made their proposal for reduced regional rates. I hope that that helps the hon. Lady.

Mr. Carmichael: The Financial Secretary has told me in the past that what France has done could not be done. Does he now accept that he was wrong?

John Healey: Let me correct the hon. Gentleman. France has not yet done this. The proposal is due to be introduced in 2007. In fact, what the French are proposing—it would be interesting to find out whether the Liberals will propose it as well—is a real increase in fuel duties that could be offset in certain regions at that point.

The policy that we have established on fuel duty must take account of all the relevant economic, social
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and environmental factors, but, of course, it is important that fuel prices are no higher than they need to be. On prices, it is important that we are clear about what is driving the level and volatility of our fuel prices. Road fuel duty is lower in real terms now, at 47.1p per litre, than in 1999, when it was 47.21p per litre. That is the equivalent of a fall in the price of road fuel of 7p per litre. So the high and volatile prices are a problem not of fuel duty, but of the international market and international prices. The best way to deal with international prices is not by imposing the complex mechanisms that are proposed in new clauses 4 or 6, but by the efforts that we are making to support the efforts of producing countries and consuming countries to increase the stability of the oil market and to improve its functioning.

Sir Robert Smith: The Financial Secretary says that he is trying to solve the problem by improving stability in the production of oil and gas. Therefore, will he ensure that the Treasury does not cause any fears to investors about the production of oil and gas in the UK? If we lecture all the other producing nations to maximise their production, we must maximise our production as well.

John Healey: I would take the hon. Gentleman’s intervention more seriously if he had been present during the debates on the Bill about the changes that have been made to the regime and its possible impact on investment and exploitation. In short, the mechanisms proposed in new clauses 4 and 6 would introduce significant complexity but do little to bring greater stability to the UK market.

I thought that we had been through the issue raised by the hon. Member for Dundee, East in previous debates. The hon. Member for Wycombe (Mr. Goodman) is nodding his assent. In fact, we have been through that issue. New clause 6 is based on the central, important misconception that high fuel prices lead to an overall increase in VAT receipts—what the hon. Member for Dundee, East describes as a windfall in VAT—but that is not necessarily the case. When people have to spend more on one commodity, they tend to spend less on others, so the overall amount of VAT receipts usually remains unchanged.

Stewart Hosie: The Financial Secretary knows that we are talking about the VAT on petrol, not the rest of the VAT take, and there was no criticism or argument when we used the example last year that a 6p rise, from 80p to 86p, would have led to a 1.2p reduction or offset in the additional VAT collected. Those figures seemed to be widely recognised last year, and I hope that he will agree that the offset model would at least work and not have a fiscal impact on the forecast yield to the Treasury.

John Healey: No. The hon. Gentleman’s problem is this: if people are spending more because the price of fuel, including the VAT element, is higher, they will tend to spend less on other commodities on which VAT is also charged. The overall yield for VAT is usually unchanged. There is no windfall VAT gain through higher fuel prices.

4 July 2006 : Column 764

UK vehicle excise duty and fuel duty rates are set at the current rates for very good reasons: first, to raise revenue to fund essential services and secondly, to help to achieve our environmental objectives and obligations. Those reasons apply equally to rural areas. We are seeing the worst of the Liberal Democrats—they are facing two ways at once. Their leader promises to hit people with an £8 billion rise in environmental tax. That is on top of the £12 billion that he needs to raise through increases in other taxes. They are suggesting a top rate of VED that is 10 times the current rate. Then, in this debate, they are advocating a cut in VED for certain special areas in which they have a special interest.

Apart from lacking a convincing intellectual or principled case for the amendments, introducing a separate rate of VED for remote rural areas would also create obvious problems with fraud and administration. A moment’s reflection would bring hon. Members to realise that. Clearly motorists could register vehicles in the designated remote areas while using the vehicles exclusively or largely in urban areas. Of course, that is going to be a problem. In Committee of the whole House, the hon. Member for Falmouth and Camborne (Julia Goldsworthy) quoted the Countryside Agency. If she looks at its figures in other respects, she will see that, in sparsely populated areas, about one in 10 houses are second homes or holiday homes. Inevitably, we would have that problem.

The amendments and new clauses are undesirable, unwelcome and unworkable. If new clause 4 is pressed to a vote, I urge my hon. Friends to oppose it.

Danny Alexander: I shall not detain the House for long. We have had an interesting debate. The points that have been made by my hon. Friends make a sound case for pressing the new clause to a vote. From my point of view, the various attempts to pronounce the name of my constituency were the most interesting aspect of the remarks made from the Labour and Conservative Benches. I will award marks out of 10 later. The arguments against the measure do not hold water, so I would like to press the new clause to a vote.

Question put, That the clause be read a Second time:—

The House divided: Ayes 60, Noes 297.
Division No. 275]
[9.37 pm


Alexander, Danny
Barrett, John
Beith, rh Mr. Alan
Brake, Tom
Breed, Mr. Colin
Brooke, Annette
Bruce, Malcolm
Burstow, Mr. Paul
Burt, Lorely
Campbell, rh Sir Menzies
Carmichael, Mr. Alistair
Clegg, Mr. Nick
Dodds, Mr. Nigel
Donaldson, Mr. Jeffrey M.
Farron, Tim
Featherstone, Lynne
Foster, Mr. Don
Gidley, Sandra
Goldsworthy, Julia
Harvey, Nick
Hemming, John
Holmes, Paul
Horwood, Martin
Hosie, Stewart
Howarth, David
Hughes, Simon
Huhne, Chris
Hunter, Mark
Kennedy, rh Mr. Charles
Lamb, Norman
Leech, Mr. John
Llwyd, Mr. Elfyn
MacNeil, Mr. Angus
Moore, Mr. Michael

Mulholland, Greg
Öpik, Lembit
Paisley, rh Rev. Ian
Pugh, Dr. John
Robertson, Angus
Robinson, Mrs. Iris
Robinson, Mr. Peter
Rogerson, Mr. Dan
Russell, Bob
Salmond, Mr. Alex
Sanders, Mr. Adrian
Simpson, David
Swinson, Jo
Taylor, Matthew
Teather, Sarah
Thurso, John
Webb, Steve
Weir, Mr. Mike
Williams, Hywel
Williams, Mark
Williams, Mr. Roger
Williams, Stephen
Willis, Mr. Phil
Willott, Jenny
Wilson, Sammy
Wishart, Pete
Tellers for the Ayes:

Mr. Alan Reid and
Sir Robert Smith

Abbott, Ms Diane
Ainger, Nick
Ainsworth, rh Mr. Bob
Allen, Mr. Graham
Armstrong, rh Hilary
Atkins, Charlotte
Austin, Mr. Ian
Austin, John
Bailey, Mr. Adrian
Baird, Vera
Balls, Ed
Banks, Gordon
Barlow, Ms Celia
Barron, rh Mr. Kevin
Battle, rh John
Benn, rh Hilary
Berry, Roger
Betts, Mr. Clive
Blackman, Liz
Blackman-Woods, Dr. Roberta
Blears, rh Hazel
Blizzard, Mr. Bob
Bradshaw, Mr. Ben
Brennan, Kevin
Brown, Lyn
Brown, rh Mr. Nicholas
Brown, Mr. Russell
Browne, rh Des
Bryant, Chris
Buck, Ms Karen
Burden, Richard
Burgon, Colin
Burnham, Andy
Butler, Ms Dawn
Byers, rh Mr. Stephen
Byrne, Mr. Liam
Caborn, rh Mr. Richard
Cairns, David
Campbell, Mr. Alan
Campbell, Mr. Ronnie
Challen, Colin
Chapman, Ben
Chaytor, Mr. David
Clapham, Mr. Michael
Clark, Ms Katy
Clark, Paul
Clarke, rh Mr. Charles
Clarke, rh Mr. Tom
Clwyd, rh Ann
Coaker, Mr. Vernon
Coffey, Ann
Cohen, Harry
Connarty, Michael
Cook, Frank
Cooper, Rosie
Cooper, Yvette
Corbyn, Jeremy
Creagh, Mary
Cruddas, Jon
Cummings, John
Cunningham, Mr. Jim
Cunningham, Tony
Curtis-Thomas, Mrs. Claire
Darling, rh Mr. Alistair
David, Mr. Wayne
Davidson, Mr. Ian
Dean, Mrs. Janet
Denham, rh Mr. John
Devine, Mr. Jim
Dhanda, Mr. Parmjit
Dismore, Mr. Andrew
Dobbin, Jim
Dobson, rh Frank
Donohoe, Mr. Brian H.
Doran, Mr. Frank
Dowd, Jim
Drew, Mr. David
Eagle, Angela
Efford, Clive
Ellman, Mrs. Louise
Engel, Natascha
Etherington, Bill
Farrelly, Paul
Field, rh Mr. Frank
Fisher, Mark
Flello, Mr. Robert
Flint, Caroline
Flynn, Paul
Follett, Barbara
Foster, Mr. Michael (Worcester)
Foster, Michael Jabez (Hastings and Rye)
Gapes, Mike
Gardiner, Barry
Gerrard, Mr. Neil
Gibson, Dr. Ian
Godsiff, Mr. Roger
Goggins, Paul
Goodman, Helen
Griffith, Nia
Griffiths, Nigel
Grogan, Mr. John
Gwynne, Andrew
Hain, rh Mr. Peter
Hall, Mr. Mike
Hall, Patrick
Hamilton, Mr. Fabian

Hanson, Mr. David
Harman, rh Ms Harriet
Harris, Mr. Tom
Healey, John
Henderson, Mr. Doug
Hendrick, Mr. Mark
Heppell, Mr. John
Hesford, Stephen
Hewitt, rh Ms Patricia
Heyes, David
Hill, rh Keith
Hillier, Meg
Hodge, rh Margaret
Hodgson, Mrs. Sharon
Hoey, Kate
Hood, Mr. Jimmy
Hope, Phil
Hopkins, Kelvin
Howarth, rh Mr. George
Hoyle, Mr. Lindsay
Humble, Mrs. Joan
Hutton, rh Mr. John
Iddon, Dr. Brian
Illsley, Mr. Eric
Ingram, rh Mr. Adam
Irranca-Davies, Huw
Jackson, Glenda
James, Mrs. Siân C.
Johnson, rh Alan
Johnson, Ms Diana R.
Jones, Lynne
Jones, Mr. Martyn
Jowell, rh Tessa
Joyce, Mr. Eric
Kaufman, rh Sir Gerald
Keeble, Ms Sally
Keen, Alan
Keen, Ann
Kelly, rh Ruth
Kemp, Mr. Fraser
Kennedy, rh Jane
Khabra, Mr. Piara S.
Khan, Mr. Sadiq
Kidney, Mr. David
Knight, Jim
Kumar, Dr. Ashok
Ladyman, Dr. Stephen
Lammy, Mr. David
Laxton, Mr. Bob
Lazarowicz, Mark
Lepper, David
Levitt, Tom
Lewis, Mr. Ivan
Linton, Martin
Lucas, Ian
MacDougall, Mr. John
MacShane, rh Mr. Denis
Mactaggart, Fiona
Mahmood, Mr. Khalid
Malik, Mr. Shahid
Mallaber, Judy
Mann, John
Marris, Rob
Marsden, Mr. Gordon
Marshall, Mr. David
Marshall-Andrews, Mr. Robert
Martlew, Mr. Eric
McAvoy, rh Mr. Thomas
McCabe, Steve
McCafferty, Chris
McCarthy, Kerry
McCarthy-Fry, Sarah
McCartney, rh Mr. Ian
McDonagh, Siobhain
McDonnell, John
McFadden, Mr. Pat
McFall, rh Mr. John
McGovern, Mr. Jim
McGuire, Mrs. Anne
McIsaac, Shona
McKechin, Ann
McKenna, Rosemary
McNulty, Mr. Tony
Meacher, rh Mr. Michael
Meale, Mr. Alan
Merron, Gillian
Michael, rh Alun
Miliband, rh David
Miliband, Edward
Miller, Andrew
Moffat, Anne
Moffatt, Laura
Mole, Chris
Moon, Mrs. Madeleine
Moran, Margaret
Morden, Jessica
Morley, Mr. Elliot
Mountford, Kali
Mudie, Mr. George
Mullin, Mr. Chris
Munn, Meg
Murphy, Mr. Denis
Murphy, Mr. Jim
Murphy, rh Mr. Paul
Naysmith, Dr. Doug
Norris, Dan
O'Brien, Mr. Mike
Olner, Mr. Bill
Osborne, Sandra
Owen, Albert
Palmer, Dr. Nick
Pearson, Ian
Plaskitt, Mr. James
Pope, Mr. Greg
Pound, Stephen
Prentice, Bridget
Prentice, Mr. Gordon
Prescott, rh Mr. John
Primarolo, rh Dawn
Prosser, Gwyn
Purchase, Mr. Ken
Purnell, James
Rammell, Bill
Reed, Mr. Jamie
Riordan, Mrs. Linda
Robinson, Mr. Geoffrey
Rooney, Mr. Terry
Roy, Mr. Frank
Ruane, Chris
Ruddock, Joan
Russell, Christine
Ryan, Joan
Salter, Martin
Sarwar, Mr. Mohammad
Seabeck, Alison
Sheerman, Mr. Barry
Sheridan, Jim
Short, rh Clare
Simon, Mr. Siôn
Simpson, Alan
Singh, Mr. Marsha
Skinner, Mr. Dennis
Slaughter, Mr. Andrew
Smith, rh Mr. Andrew

Smith, Ms Angela C. (Sheffield, Hillsborough)
Smith, Angela E. (Basildon)
Smith, Geraldine
Smith, rh Jacqui
Snelgrove, Anne
Soulsby, Sir Peter
Southworth, Helen
Spellar, rh Mr. John
Starkey, Dr. Phyllis
Stewart, Ian
Stoate, Dr. Howard
Strang, rh Dr. Gavin
Stringer, Graham
Sutcliffe, Mr. Gerry
Tami, Mark
Taylor, Ms Dari
Taylor, David
Thornberry, Emily
Timms, Mr. Stephen
Tipping, Paddy
Todd, Mr. Mark
Touhig, Mr. Don
Truswell, Mr. Paul
Turner, Dr. Desmond
Turner, Mr. Neil
Twigg, Derek
Ussher, Kitty
Vaz, Keith
Vis, Dr. Rudi
Walley, Joan
Waltho, Lynda
Wareing, Mr. Robert N.
Watson, Mr. Tom
Watts, Mr. Dave
Whitehead, Dr. Alan
Wicks, Malcolm
Williams, rh Mr. Alan
Williams, Mrs. Betty
Wills, Mr. Michael
Winnick, Mr. David
Winterton, Ms Rosie
Wood, Mike
Woodward, Mr. Shaun
Wright, Mr. Anthony
Wright, David
Wright, Mr. Iain
Wright, Dr. Tony
Tellers for the Noes:

Mr. Ian Cawsey and
Jonathan Shaw
Question accordingly negatived.
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