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There are further questions. What are the qualifying criteria for retail outlets? How is the identity of the person claiming the rebate to be verified? Should the proposal be met by a commensurate tax rise elsewhere? The debates have already established pretty clearly that the use of the derogation in France has raised fuel rates in some areas, in order to pass on the reduction to others. The hon. Gentleman and his party would have to answer that question. In Committee, the Liberals
simply said that they would favour a tax cut. I am simply saying that that is not how the derogation appears to be working in France at present.
John Healey: The hon. Gentleman is right: in France, the derogation is leading to an increase in regional rates. Principally, that is to help defray the costs of responsibilities that used to be carried out by central Government and are now carried out at the regional level, and it is time-limited to three years.
I am not saying that all these questions are incapable of resolution; plainly they are, or at least might be, capable of resolution. None the less, the terms of the new clause, on which the House will presumably be asked to vote, are, like last years proposals, not a workable solution. I want to explain why.
Mr. David Heath (Somerton and Frome) (LD): I am listening carefully to the hon. Gentlemans detailed arguments as to why my hon. Friends proposal does not work. He has acknowledged that those of us in rural areas, where fuel prices are higher and there is no access to public transport, have a problem. What is his solution to that problem?
Mr. Goodman: I am tempted to reply that when we get a workable solution, rather than three unworkable proposals, we will respond with our own; my answer, however, is that I will come to that precise point in a moment, and explain why we might have been able to support the new clause had it been formed in a slightly different way.
A Bill is amendable, but regulations are not. Under the new clause, before the next Finance Bill completes its passagewe must presume that it will not have done so by 1 MayMinisters would introduce the scheme by unamendable regulation. That cannot possibly be right. Were it right to propose such a scheme, surely Members would want to be able to amend the proposal. However, we have not had any proposal that is capable of being amended, only a vague outline proposal.
We would have been pretty sceptical had the Liberals tabled an amendment calling for a report on the swipe-card scheme, but we would have said that the Treasury should publish an assessment. I am not sure why the hon. Member for Inverness, Nairn, Badenoch and Strathspey did not table an amendment calling for a report, because plenty of amendments do. Perhaps he felt that there were already a lot of those. Whatever his reason, he has essentially proposed an outline scheme, which the Minister would be required to rush through before the next Finance Bill is complete and which the House could not amend. On that basis, no one should support it in the Lobby.
Mr. Deputy Speaker: Order. I am looking for the hon. Member for Falmouth and Camborne (Julia Goldsworthy) among a forest of her colleagues. I think that I should give the Liberal Front-Bench spokesman the opportunity to speak first.
I welcome the opportunity to discuss the proposal further, not least because it has been interesting to have a little more light cast on the absence of any constructive proposals from the Conservatives. The hon. Gentleman said that the problem could have been resolved had the new clause been phrased slightly differently, but we see no alternative.
Julia Goldsworthy: I am sure that you would call me out of order, Mr. Deputy Speaker, if I suddenly disappeared down a side alley to discuss the vehicle excise duty when we are talking about a fuel duty rebate. It might be worth pointing out in passing, however, that proposals similar to those made by the Liberal Democrats have been accepted to increase vehicle excise duty. The principles, therefore, have been adopted.
Mr. Alistair Carmichael (Orkney and Shetland) (LD): If those on the Conservative Front Bench accept that there is a problem but choose not to propose a solution, surely the only conclusion we can draw is that they simply do not care.
In the Committee of the whole House, the hon. Member for Wolverhampton, South-West (Rob Marris) commented on the need to have carrots and sticks for environmental measures to try to change behaviour. We discussed those issues, including this one, at great length. I am pleased that my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) has developed the argument further since we had the opportunity to raise it in Committee a few weeks ago.
In terms of the carrot and the stick, my hon. Friend was trying to make the point that in areas of his constituencyand, for that matter, in areas in my neighbouring constituencies, although I suspect not in mine because it is urbanwhere there is no alternative to the car, the increase in fuel duty proposed by the Chancellor in the Budget, a measure that the Liberal Democrats welcomed, will not have an impact on peoples behaviour because it is impossible for them to change it, as there is no alternative. On that basis, it is sensible for the Government to consider seriously the idea of taking up the derogation from article 19 of the EU energy products directive, as other countries have done, and recognising the difficulties that people in rural areas face.
As my hon. Friend said, those people are facing a triple whammy. They have lower wages than average and no access to public transport, and they pay higher fuel prices at the pump. His solution is not that they
should have cheaper fuel, but that they should pay a price comparable with that paid by others. It is important not to underestimate the effect that that triple whammy has not just on those individuals, but on the local economy. If people have to drive elsewhere to get fuel for their car, the chances are that they will spend their money in other places as well. It will undermine their local community and leave people who do not have access to a car with less access to other resources, because
Mr. Deputy Speaker: Order. I am sorry to interrupt the hon. Lady, but her voice fades away if she turns to her colleagues and does not address the Chair. That is most distressing for those who are trying to report our debate.
We have a practical remedy. One reason why we have the differential in fuel prices is market failure. Prices are higher not just because the cost of transporting the fuel is higher, but because there is no competition. It has been argued that the proposal could be abused, but if people have to drive a 25-mile round trip simply to get to their nearest petrol pump, the idea of their doing a 100-mile round trip to get 1p off a litre of fuel is highly unlikely.
Rob Marris (Wolverhampton, South-West) (Lab): Can the hon. Lady indicate whether she thinks that if the price of fuel went down in rural areas as a result of the new clause, fuel usage would be likely to remain the same or go up, first by existing residents of remote rural areas, and secondly in terms of encouraging commuting by people who currently do not live in those areas but who would go there to get cheaper fuel, and therefore commute longer distances? She talks about local shopping. If fuel becomes cheaper for people in remote rural areas, it strikes me, as someone who represents people who live in an urban constituency, that lower fuel prices would make them more likely to drive a distance for their shopping than to support the local shopping facilities that she and I wish to see.
Julia Goldsworthy: Had the hon. Gentleman been in the Chamber when my hon. Friend laid out his argument, perhaps he would have understood that such individuals would not qualify for the scheme set out in the new clause.
Mr. Heath: Some hon. Members who represent urban areas should get out into the country more and see what life is like there. There is not a local shop to go to, because it is closed. There will not be a local garage to go to either, unless we have this proposal or something similar.
Listening to the debate, and thinking about the impact that higher fuel prices are having in many rural constituencies, draws my mind back to comments made by the current Chancellorthe Prime Minister of the
very near futureon the need for child poverty to be recognised and for action to be taken across Departments to tackle it. Fuel poverty is recognised more widely, and the Government have acted to address that problem. We have raised the specific example of people on low incomes who spend a relatively high proportion of their income on fuel to get around, and to get to their jobs. I am interested to hear how the Treasury thinks that not having proposals to tackle that problem is having an impact on fuel poverty. When the new Prime Minister is in his place, perhaps the Government will need to think again about taking action if they are to hit their poverty targets.
Stewart Hosie: I have some sympathy with the new clause, not least because I tabled similar amendments in the past few years, in particular in what was new clause 6 on the Floor of the House on 28 June last year. Proposed new subsection (1AB)(b) of that new clause provided for
specific fuel duty reductions targeted at fuel sold in sparsely populated areas.
I hope that the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) recognises that, as the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) did not in last years debate.
The hon. Member for Inverness, Nairn, Badenoch and Strathspey has at least sought to answer some of the legitimate questions posed about similar amendments over the past few years. He has, however, left other questions unanswered, and I shall touch on those in turn. Subsection (2) of new clause 8 says:
The purpose of the Scheme is to provide a rebate on road fuel duty to qualifying persons at qualifying retail outlets.
The hon. Gentleman has tried to use regulations to define remote rural areas. In a sensible attempt to bypass the definitions already in placewhich, off the top of my head, I think may cover 95 per cent. of the land mass or 30 per cent. of the peoplehe has limited the definition to the land mass that contains no more than 3 per cent. of the population. It may be arbitrary and need to be defined a little more, but that approach is sensible.
The hon. Gentleman said that regulations would provide for a system of eligible vehicles. A great deal more work is required to be done on that, especially if we are not simply taking account of the cost of living issues in remote rural and sparsely populated areas, but considering economic development in those areas as well, particularly in relation to a very short seasonal tourist trade. I am not making a special pitch for that tonight, but work should be done on that issue in conjunction with the rest of this area.
The hon. Gentleman did not define the primary residence qualification, which would have been useful in defining who and what was eligible, but work could be done on that. He did say that the regulation would look at how administrative costs would be defrayed. The difficulty is that that would cover only the administrative costs of a system that might be cumbersome and slightly bureaucraticalthough it would not necessarily be so. There is no attempt to
specify how the real cost of the reduction might be funded, as we did previously with the VAT offset.
Having said all that, I would not normally support an amendment with so many weaknesses, but the hon. Gentleman said that he would seek a derogation and he hoped that the principle of what he was proposingthat the high costs faced by those living in sparsely populated areas should be defrayedwould be accepted. With that heavy caveat on the record, we would be prepared to support the new clause, should he push it to a vote.
More importantly, the hon. Member for Wycombe (Mr. Goodman) said that he believed that some of the issues were resolvable. In previous debates, the Financial Secretary has expressed some sympathy for people who live in remote and rural areas and suffer from what are, in some cases, 10, 15 and 20 per cent. increases in the cost of a litre of fuel compared with the average price in the nearest modest county town or city. With the good will that exists, and the persistence shown by many hon. Members on this issue, I hope that a solution to the problem might be found for a subsequent Budget or Finance Bill. I look forward to hearing what the Financial Secretary has to say on this .
John Thurso: I rise to support my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) and to congratulate him on having taken on board the criticisms that have been made in the past and coming up with a workable and sensible scheme. If I had a criticism of it, it would be that it shows too much restraint and not enough generosity, but I would rather have some crumbs than none at all, so I am happy to support him. If there is an element of Groundhog Day about this debate, I make no apology for entering the fray again. As a great Scottish king once said, if at first you do not succeed, try, try and try again. My hon. Friend is certainly doing his best.
The issue is simple. As I drove down the A9 this morning, in Brora, petrol was 102.9p a litre, so it is at a premium compared with the figures that my hon. Friend gave for Inverness, Edinburgh and London. That is a regular occurrence. Over the years that I have spoken about this issue, I have looked at the premium on many occasions and it ranges from a minimum of 6p up to a maximum in my constituency of 12p. The reason is straightforwardit has been investigated repeatedly by the relevant competition authoritiesand it is because there are too few vehicles crossing the forecourt to provide sufficient cash income to cover the fixed costs of running that forecourt. Therefore, the extra price is necessary. My hon. Friend spoke of the triple whammy, and I will not labour that point, but I will point out some of the facts about the location of petrol stations.
If one is at the western end of the north coast at Durness and one drives for an hour or so to Tongue, which is about halfway across, there are no petrol stations in between. It is some 50 miles, but much of the road is single track and it is mostly empty and straight, so one drives at an average 50 to 55 mph. Between Tongue and Thurso there are two petrol stations, one in Caithness, near Thurso, and one that is about halfway. If one goes south from Durness to
Kinlochbervie, which is the best part of two hours to drive, there is one filling station on the main road at Scourie. The residents of those areas therefore have to drive up to 20 miles and back just to fill up. Part of the problem is that rural filling stations have closed because they have been unable to keep going for the commercial reasons that I have mentioned.
We all accept that in the 21st century transport in such areas is not a luxury but a necessity. If one wishes to access a hospital from the north of Sutherland, one has a 200-mile plus round trip, with no public transport that can get one there. The NHS Highlands is good about providing taxis for those who cannot access private cars, but the vast bulk of people have to use a private car. Many services that people throughout the country take for granted as readily accessible are, as a matter of course in the far north, a 20, 30, 40 or 50 mile journey.
My hon. Friends scheme of a 2.4p rebate, based on the tight criteria he has drawn and using the experience of the Scottish Executives air discount scheme, which applies to Caithness and most of Sutherland as well as the islands, is a good one. He has given the figures for the cost to the Exchequer, but he has worked them out on the basis that 100 per cent. of those eligible will take up the scheme. As we know from questions asked in the Treasury Committee, the take-up rates of almost every benefit offered are 50 per cent. or lower. It is therefore highly unlikely that that cost would be the effective cost. I have one small suggestion that might help, which is to devolve the issue to the Scottish Government and let them pay for it out of the block grant. That would remove the cost from the Treasury entirely and please the hon. Member for Dundee, East (Stewart Hosie).
The burden carried by my constituents is very real and I have sought to bring it before the House on several occasions, as have my hon. Friends who represent similar constituencies. It is a genuinely practical scheme, which would allow Ministers to put something in place that would alleviate that burden without giving any advantage. I was heartened to hear the hon. Member for Wycombe (Mr. Goodman), speaking for the Unionists, talk about his agreement with the principle, which is a great step forward from last year. I only hope that the occupants of the Treasury Bench will have undergone a Damascene conversion from their somewhat uncaring attitude and that we may look forward to some encouragement at least from the Financial Secretary.
Mr. Alan Reid: We all know that fuel that is sold in remote areas is sold at a much higher price than in urban areas. The purpose of new clause 8 is to achieve a level playing field to work against the triple whammy of higher fuel prices, no public transport alternatives and the need to drive longer distances. I shall give some examples from my constituency that will show how large the differentials can be. On the large islands of Mull and Islay, a litre of unleaded is usually some 15p to 20p more than in Glasgow. On the smaller islands, the differential is much greater. On Coll and Colonsay, it is usually some 30p a litre extra.
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