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13 May 2009 : Column 922

Even that is an optimistic reading of what the Opposition have proposed. A close reading of pages 3 and 4 of their consultation document, which they put out last July, suggests that their so-called stabiliser might be based on fuel prices rather than oil prices, which is another odd way of doing it. If we were to interpret the Opposition’s proposal in this way, today’s average petrol price figures quoted from the same source as they used,, would mean that the fuel duty stabiliser would put an immediate 5.5p on the price of unleaded fuel. If such a mechanism were introduced in the future, there would be potential for significant gaps in the public finance forecast.

It is clear that these proposals are populist. They would not work in practice, they achieve the opposite of what they claim on the tin, and they do not achieve stability at all. They achieve unreliability and great volatility. I therefore hope that the House will vote against them.

Stewart Hosie: The Minister has spoken for some time. In her usual generous way, she explained the Government’s position carefully. At the beginning she spoke about persistence. That is correct. We recognised that there is a problem. She also criticised the concept, and at one point spoke about trying to manipulate commodity prices. The price of oil, the commodity, may drive the policy, but there is no attempt at all to manipulate the commodity price. The amendment is designed to smooth out the price at the pump as a consequence of movements in commodity prices.

The Minister also spoke about VAT. We have not spoken of a VAT windfall. We have spoken of a value equivalent to the increase in VAT, which would be generated by an increase in the price at the pump. That is a perfectly reasonable measure to use.

The hon. Member for Taunton (Mr. Browne), who speaks for the Liberals, made a number of spurious claims. He ignored the ability to reset the baseline, which was vital. He chose a starting point for his example which, if not random, was certainly chosen to—

Mr. Alan Reid: Will the hon. Gentleman give way?

Stewart Hosie: No. I am criticising his hon. Friend.

Mr. Reid: It was my calculation.

Stewart Hosie: If it was the hon. Gentleman’s calculation, he should have known better. I am going to rush through this quickly.

Sir Robert Smith: Will the hon. Gentleman give way?

Stewart Hosie: No. Sit down.

The Second Deputy Chairman: Order. The hon. Gentleman must remember that it is my task to decide whether hon. Members are allowed to stand up or sit down in the Chamber.

Stewart Hosie: Thank you, Sir Michael. [Interruption.] The hon. Member for Argyll and Bute (Mr. Reid) indeed chose a rubbish starting point.

I recognise that, as the Minister said, the price cannot be fully stabilised. The argument is that it is simply smoothed out. The Government’s other argument was that it would be difficult to determine whether a change
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was a spike or a structural change in the price. The whole point about setting regular dates when the measure would be revisited—and about allowing for that flexibility—is to ensure that we identify whether there is a real spike, an upward trend or a systemic or structural change to the price.

We need to do something about the issue and take action. I have heard the criticisms and arguments from the Exchequer Secretary and her hon. Friends, because she, too, has been persistent for many years. However, in the absence of a Government alternative or, even, any recognition of the real difficulties for families, businesses and hauliers, I beg leave to press my amendment to a Division.

Question put, That the amendment be made.

The Committee divided: Ayes 15, Noes 310.
Division No. 125]
[5.5 pm


Davies, Mr. Dai
Dodds, Mr. Nigel
Donaldson, rh Mr. Jeffrey M.
Hancock, Mr. Mike
Hosie, Stewart
Llwyd, Mr. Elfyn
MacNeil, Mr. Angus
McCrea, Dr. William
Robertson, Angus
Robinson, rh Mr. Peter
Simpson, David
Taylor, Dr. Richard
Weir, Mr. Mike
Williams, Hywel
Wilson, Sammy
Tellers for the Ayes:

Pete Wishart and
John Mason

Abbott, Ms Diane
Ainger, Nick
Ainsworth, rh Mr. Bob
Alexander, rh Mr. Douglas
Anderson, Mr. David
Anderson, Janet
Armstrong, rh Hilary
Atkins, Charlotte
Austin, Mr. Ian
Bailey, Mr. Adrian
Baird, Vera
Balls, rh Ed
Banks, Gordon
Barlow, Ms Celia
Barron, rh Mr. Kevin
Battle, rh John
Bayley, Hugh
Beckett, rh Margaret
Begg, Miss Anne
Bell, Sir Stuart
Benton, Mr. Joe
Berry, Roger
Betts, Mr. Clive
Blackman, Liz
Blackman-Woods, Dr. Roberta
Blizzard, Mr. Bob
Borrow, Mr. David S.
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, rh Andy
Butler, Ms Dawn
Byers, rh Mr. Stephen
Byrne, rh Mr. Liam
Caborn, rh Mr. Richard
Cairns, David
Campbell, Mr. Alan
Campbell, Mr. Ronnie
Caton, Mr. Martin
Cawsey, Mr. Ian
Challen, Colin
Chapman, Ben
Clapham, Mr. Michael
Clark, Paul
Clarke, rh Mr. Charles
Clarke, rh Mr. Tom
Clelland, Mr. David
Clwyd, rh Ann
Coaker, Mr. Vernon
Coffey, Ann
Cohen, Harry
Connarty, Michael
Cook, Frank
Cooper, Rosie
Cooper, rh Yvette
Corbyn, Jeremy
Cousins, Jim
Crausby, Mr. David
Creagh, Mary
Cruddas, Jon
Cryer, Mrs. Ann
Cummings, John
Cunningham, Mr. Jim
Cunningham, Tony
Curtis-Thomas, Mrs. Claire

David, Mr. Wayne
Davidson, Mr. Ian
Davies, Mr. Quentin
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
Eagle, Maria
Efford, Clive
Ellman, Mrs. Louise
Engel, Natascha
Ennis, Jeff
Farrelly, Paul
Field, rh Mr. Frank
Fitzpatrick, Jim
Flello, Mr. Robert
Flint, rh Caroline
Flynn, Paul
Follett, Barbara
Foster, Mr. Michael (Worcester)
Francis, Dr. Hywel
Gapes, Mike
Gardiner, Barry
George, rh Mr. Bruce
Gerrard, Mr. Neil
Gibson, Dr. Ian
Gilroy, Linda
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. David
Hamilton, Mr. Fabian
Hancock, Mr. Mike
Hanson, rh Mr. David
Harman, rh Ms Harriet
Harris, Mr. Tom
Havard, Mr. Dai
Healey, rh John
Hendrick, Mr. Mark
Hepburn, Mr. Stephen
Hesford, Stephen
Heyes, David
Hill, rh Keith
Hillier, Meg
Hodgson, Mrs. Sharon
Hoon, rh Mr. Geoffrey
Hope, Phil
Hopkins, Kelvin
Howarth, rh Mr. George
Howells, rh Dr. Kim
Hoyle, Mr. Lindsay
Hughes, rh Beverley
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.
Jenkins, Mr. Brian
Johnson, rh Alan
Johnson, Ms Diana R.
Jones, Helen
Jones, Mr. Kevan
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
Khan, Mr. Sadiq
Kidney, Mr. David
Kilfoyle, Mr. Peter
Knight, rh Jim
Kumar, Dr. Ashok
Ladyman, Dr. Stephen
Lammy, rh Mr. David
Laxton, Mr. Bob
Lazarowicz, Mark
Lepper, David
Levitt, Tom
Lewis, Mr. Ivan
Linton, Martin
Lloyd, Tony
Love, Mr. Andrew
Lucas, Ian
Mackinlay, Andrew
Mahmood, Mr. Khalid
Malik, Mr. Shahid
Mallaber, Judy
Mann, John
Marris, Rob
Marsden, Mr. Gordon
Marshall-Andrews, Mr. Robert
Martlew, Mr. Eric
McAvoy, rh Mr. Thomas
McCarthy, Kerry
McCarthy-Fry, Sarah
McCartney, rh Mr. Ian
McDonagh, Siobhain
McDonnell, John
McFadden, rh Mr. Pat
McFall, rh John
McGuire, rh Mrs. Anne
McIsaac, Shona
McKechin, Ann
McKenna, Rosemary
McNulty, rh Mr. Tony
Meacher, rh Mr. Michael
Merron, Gillian
Michael, rh Alun
Milburn, rh Mr. Alan
Miliband, rh Edward
Miller, Andrew
Mitchell, Mr. Austin
Moffatt, Laura
Mole, Chris
Morden, Jessica
Morgan, Julie
Morley, rh Mr. Elliot
Mullin, Mr. Chris
Munn, Meg

Murphy, Mr. Denis
Murphy, rh Mr. Jim
Murphy, rh Mr. Paul
Naysmith, Dr. Doug
Norris, Dan
O'Brien, Mr. Mike
O'Hara, Mr. Edward
Olner, Mr. Bill
Osborne, Sandra
Owen, Albert
Palmer, Dr. Nick
Pearson, Ian
Plaskitt, Mr. James
Pope, Mr. Greg
Pound, Stephen
Prentice, Mr. Gordon
Primarolo, rh Dawn
Prosser, Gwyn
Purchase, Mr. Ken
Purnell, rh James
Rammell, Bill
Raynsford, rh Mr. Nick
Reed, Mr. Andy
Reed, Mr. Jamie
Reid, rh John
Riordan, Mrs. Linda
Robertson, John
Robinson, Mr. Geoffrey
Rooney, Mr. Terry
Roy, Mr. Frank
Roy, Lindsay
Ruane, Chris
Ruddock, Joan
Russell, Christine
Salter, Martin
Sanders, Mr. Adrian
Seabeck, Alison
Sharma, Mr. Virendra
Shaw, Jonathan
Sheridan, Jim
Short, rh Clare
Simon, Mr. Siôn
Simpson, Alan
Singh, Mr. Marsha
Skinner, Mr. Dennis
Slaughter, Mr. Andy
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
Spink, Bob
Starkey, Dr. Phyllis
Stewart, Ian
Stoate, Dr. Howard
Stringer, Graham
Stuart, Ms Gisela
Sutcliffe, Mr. Gerry
Tami, Mark
Taylor, Ms Dari
Taylor, David
Thomas, Mr. Gareth
Thornberry, Emily
Timms, rh Mr. Stephen
Tipping, Paddy
Todd, Mr. Mark
Touhig, rh Mr. Don
Trickett, Jon
Turner, Dr. Desmond
Turner, Mr. Neil
Twigg, Derek
Ussher, Kitty
Vis, Dr. Rudi
Walley, Joan
Waltho, Lynda
Ward, Claire
Watts, Mr. Dave
Whitehead, Dr. Alan
Williams, rh Mr. Alan
Wills, rh Mr. Michael
Wilson, Phil
Winnick, Mr. David
Winterton, rh Ms Rosie
Wood, Mike
Woodward, rh Mr. Shaun
Woolas, Mr. Phil
Wright, Mr. Anthony
Wright, David
Wright, Mr. Iain
Wright, Dr. Tony
Wyatt, Derek
Tellers for the Noes:

Steve McCabe and
Barbara Keeley
Question accordingly negatived.
13 May 2009 : Column 924

13 May 2009 : Column 925

Mr. Alan Reid: I beg to move amendment 5, page 10, line 39, at end insert—

‘(8A) After section 14F insert the following—

“14G Remote rural fuel discount scheme

(1) The Treasury shall by regulations provide for the introduction, by no later than 1 April 2010, of a remote rural fuel discount scheme.

(2) The purpose of the scheme is to provide a rebate on road fuel duty at qualifying retail outlets in qualifying areas to reduce the premium paid for fuel in such areas over the national average.

(3) Qualifying retail outlets under subsection (2) are outlets located in qualifying areas meeting any criteria as defined under subsection (4).

(4) Qualifying areas are remote rural areas as may be defined by regulations under subsection (1).

(5) Regulations under subsection (1) may—

(a) specify the amount of the fuel duty rebate;

13 May 2009 : Column 926

(b) define ‘remote rural areas’;

(c) define qualifying retail outlets, including any restriction;

(d) specify how the rebate is to be applied, including—

(i) authorising HMRC to define procedures and conduct audits, and

(ii) how any administrative costs are to be defrayed;

(e) provide for it to be an offence for a person fraudulently to supply or sell rebated fuel other than as proscribed by these regulations;

(f) provide for a system of registration of eligible retail outlets; and

(g) provide for the scheme to be administered in Scotland by the Scottish Executive, in Wales by the Welsh Ministers and in Northern Ireland by the Northern Ireland Executive.”.’.

I am delighted to move amendment 5, which stands in my name and that of several of my hon. Friends. Hon. Members will notice that this amendment is similar to amendments that have been tabled by hon. Friends on the Liberal Democrat Benches in previous years, and I make no apology for returning to the subject this year. The aim of the amendment is to tackle the continuing unfairness of the fuel premium that drivers have to pay in remote rural areas. This serious problem has a severe impact on the economy of those areas on the mainland and on all our islands.

Mr. Angus MacNeil (Na h-Eileanan an Iar) (SNP): The hon. Gentleman will be aware that, in constituencies such as mine and his own, we pay more tax per litre of fuel than in any other part of the United Kingdom. That anomaly should not continue, and a fuel duty regulator is urgently needed by our island communities so that our taxes can be fair, equal and level across the country.

Mr. Reid: The hon. Gentleman is absolutely right to say that his constituents and mine pay more tax on our fuel than people in the rest of the country. The way to tackle that is through the proposal in our amendment for a rural fuel discount.

People who live in remote rural areas suffer a triple whammy on their fuel. First, by necessity, they have to travel long distances. Secondly, the price of fuel is higher than in urban areas. Thirdly, there is a complete lack of public transport. The premium that people in remote areas have to pay for their fuel varies. I will give some examples that compare the prices in my own constituency with those charged in Glasgow. Close to the eastern boundary of my constituency, which is closer to Glasgow, the price tends to be 1p or 2p a litre higher than it is in the city. Moving to the furthest part of the mainland from Glasgow, the price differential around Campbeltown, down at the tip of the Kintyre peninsula, was 6p a litre more than in Glasgow the last time I checked. The price tends to be even higher at some of the small filling stations in the more rural parts of the mainland.

On the islands, the price differential in Rothesay on the Isle of Bute was 5p a litre when I checked recently. That is bad enough, but the price differential becomes far larger on the Atlantic islands. On the larger islands such as Mull and Islay, the price of fuel is usually about 15p a litre higher than in Glasgow, and as much as 30p higher on smaller islands such as Coll and Colonsay. That price differential, which has to be paid by local
13 May 2009 : Column 927
people going about their ordinary daily lives and by local businesses, makes daily life and running a business much more difficult in those areas.

Mr. MacNeil: I am grateful to the hon. Gentleman for giving way again; he is most kind. When I first raised this issue with the Treasury three years ago, I was told that if a fuel duty regulator such as that proposed in the amendment was brought in for the islands, people would travel from places such as Glasgow to buy fuel in Stornoway, Benbecula or Barra. That was clearly nonsense, and the hon. Gentleman’s proposal represents at least a step towards the kind of parity that is sadly lacking at the moment, as we can see from his figures.

Mr. Reid: The hon. Gentleman is absolutely right. The Treasury has certainly used that argument in relation to the mainland, although even Treasury Ministers have not tried to argue that that would be the case for the islands. I will describe later how that supposed pitfall can be overcome on the mainland. Clearly, no one would pay the extortionate fares charged by Caledonian MacBrayne to go to the islands in my constituency.

Mr. MacNeil: It has got better with RET and the SNP.

Mr. Reid: The hon. Gentleman is tempting me, but he knows perfectly well that the Scottish Government treat my constituency much less fairly than his. However, I shall return to the subject of the debate before you intervene, Sir Michael.

In remote areas, the car is an essential, not a luxury. Let us consider the purpose of the high fuel duty. One argument that the Government put forward is that it is designed to encourage people to change their behaviour and to use public transport instead of their cars. However, that fails completely in remote rural areas because of the complete lack of public transport alternatives. No environmental purpose would be served by local councils in remote areas subsidising more buses, because they would be running with only one or two passengers, and a couple of passengers on a bus are clearly a great deal less environmentally friendly than people using a car.

John Thurso: Is my hon. Friend aware that Royal Mail, in its pre-privatisation mode, has slashed post bus services in many of our constituencies? As a result, there are now no post buses, and no bus services of any kind, on the north coast of Scotland.

Mr. Reid: Royal Mail is also removing two post bus services in my constituency, on the islands of Colonsay and Lismore, thus causing more difficulties for local people and visitors alike.

To add insult to injury, as well as paying a higher price for their fuel, people pay more to the Exchequer in tax because the higher price means that VAT is higher as well. A basic principle of taxation is that it should be equitable, but it is clearly not equitable for an area to pay more VAT than is paid in other parts of the country. What makes the position even more perverse is that fuel costs are lower in areas with public transport alternatives than in areas with none.

13 May 2009 : Column 928

Dan Rogerson (North Cornwall) (LD): My hon. Friend is making a strong case. As he has pointed out, a key element of the problem is that it is harder to run businesses and other services in some rural areas. Although some may view such areas as prosperous, wages are often very low, and the economy is under threat for all sorts of other reasons.

Mr. Reid: I am not sure whether my hon. Friend has been reading my speech over my shoulder, but I was about to make that very point. In the highlands and islands, incomes are much lower than in the rest of the country, but the Treasury is asking people there to spend far more on fuel and to pay more tax on it. Fuel represents a greater share of disposable income in the highlands and islands in the first place.

The purpose of amendment 5 is to identify a workable solution to the problem: reducing the premium that people are paying for their fuel in remote rural areas. On previous occasions, the Chancellor and other Treasury Ministers, including the Exchequer Secretary, have expressed sympathy and a desire to look at the evidence. As a result, my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) produced a paper, a copy of which I have with me. My hon. Friend circulated the paper, sending it to, among others, the Chancellor, and the amendment is based on it.

Scottish national statistics include what is described as the eightfold urban-rural classification, which is shown on a map in my hon. Friend’s paper along with the definitions. I understand that similar definitions exist in other parts of the United Kingdom. The Treasury could use various classifications depending on exactly where it wanted to target the scheme, but in Scotland I should prefer it to include all the islands as well as two of the mainland classifications: very remote rural areas with a population of under 3,000 and more than a 60-minute travel time to a settlement with a population of over 10,000, and very remote small towns with a population of between 3,000 and 10,000 and more than a 60-minute travel time to a settlement with a population of over 10,000. Other definitions could be used, however, and the amendment allows the Treasury to define the area to be covered by the scheme in regulations.

So it is perfectly possible to define the area to be covered by the scheme, but we also need—and the amendment provides for—a simple method of passing the tax rebate through the system. To do that, we need only designate the retail filling stations. Different filling stations would be eligible for different levels of discount depending on where they were situated. Obviously, a far higher discount would apply on islands than on remote parts of the mainland.

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