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However, I was surprised by the comment in the Statement that it is essential to prevent industrial action at Grangemouth disrupting the flow of North Sea oil and gas. What actions could the Government take if the strike were to escalate? Of course, as long as the strike is legal, it is possible for those people to undertake work. I do not think it would be in their interests, of course, but do the Government have a subsidiary plan for bringing workers in to make sure that the supply from the North Sea continues? If disruption was to take place, do the Government have an estimate of how much the Treasury would suffer from loss of tax revenue in the short term, given that so many demands are being made for Treasury money at the moment?

4.31 pm

Baroness Vadera: My Lords, I wholeheartedly agree with the noble Baroness, Lady Wilcox, that we need to have a sense of proportion about what is happening. Indeed, the Secretary of State was clear in urging that people do not buy more than they need and that they maintain their normal buying patterns. This will ensure that there are no shortages.

There have been reports of a couple of incidents of petrol stations putting up their prices. While in some instances that may be understandable, we have to be clear that in no sense can profiteering be acceptable. If there is any evidence of collusion in any way, the OFT will be ready to investigate.

On the actions that we will be able to take should they be necessary, it is not the current assessment that any emergency actions are needed. If they were, there is a national emergency action plan which will enable us to ensure that fuel supplies are available to essential services, that we can do bulk purchasing, and that we can distribute supplies and put caps on individual purchases. There is no assessment that any of this is

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currently needed. The Energy Act 1976 allows us to take action to direct the industry, but again that is not assessed to be needed. However, a memorandum of understanding, which has been in place for a while, was activated this Monday. It forms part of our discussions with the industry and allows those in the industry to have discussions with each other without fear of any issues around competition law. This will enable them to ensure that there is a managed supply.

As to the longer-term impact, it is important that we have the same sense of proportion. This is a two-day industrial action and there is no reason to believe that it will have any significant impact on investment plans going forward, on the industry or on jobs.

On the noble Lord’s questions about rural areas, the Scottish Executive are very seized of this issue. The supply in rural areas is usually by coastal tankers and barges and provisions have been made to ensure that these can be resupplied as quickly as possible.

I do not know whether the Treasury has made any estimate of lost tax revenue. I suspect that if it had it would not say, so I am not going to promise to write on this matter.

We urge both parties to come back to the table and resume negotiations. As the noble Baroness and the noble Lord have said, the issue of longer-term impact arises out of sustained action rather than any immediate action.

I hope I have answered all the questions, but if I have not I will come back. The noble Baroness asked whether we will maintain our scrutiny of what is going on. We will be very vigilant. My department is working closely with industry, through direct discussions with the MAU, the Scottish Executive, local authorities and the emergency services. We will maintain those discussions and report back to Parliament on any issues that arise.

4.35 pm

Lord O'Neill of Clackmannan: My Lords, I thank my noble friend for repeating the Statement. For many years I had the privilege of representing many of the people involved in this dispute. Indeed, at one time my former parliamentary constituency was the boundary wire of the petrochemicals complex at Grangemouth. It has to be recognised that this is only a 48-hour strike. It may well be only the first, although I hope it will be the last. I take the point that ACAS has an important role to play here.

The significance of pension arrangements for people in the petrochemicals industry should not be underestimated. They have a tradition of being retired comparatively early and therefore pensions are of almost disproportionate significance. Men are normally laid off before they are 60 and they tend to be long-serving workers, so anxieties about pensions are often of considerable substance. This is not the kind of action that the men and women whom I know, and had the privilege of representing, take willy-nilly; it comes as a last resort.

In some respects, this is different from the way they were treated by BP when it was their tough but, at times, paternalistic employer. Ineos represents a rather different breed, and there is a different response coming

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at this time. I would be cautious about this, because these people are fairly moderate workers. They are not patsies, they do not get taken for a ride and they do not like to be—as they would see it—abused in industrial relations. We can hope only that ACAS will be able to resolve the dispute as quickly as possible. They know the routes. It is just a question of getting both sides walking along the same way at the same time.

Baroness Vadera: My Lords, I agree with my noble friend that the most important issue now is to get both parties back to the table. I hope that ACAS will remain involved. It would be inappropriate for me to comment on an individual’s company’s pension issues, particularly when they are currently in dispute.

Lord Steel of Aikwood: My Lords, I underline the point made by my noble friend Lord Redesdale from over the border in Northumberland. Over the past decade there has been a serious reduction in the number of filling stations available in rural areas in Scotland; quite a major drop. It is therefore essential—although I realise that this matter is more for the Scottish Executive than for the Minister’s department—to ensure that the rural areas are safeguarded if there are any diminutions of supply, because the people there do not have the choices that there are in the city.

Can the Minister tell us what retail products come out of the Grangemouth refinery? The reason I ask that is that there have been conflicting press reports, one of which suggested that it is just diesel fuel that it refines and that there is no problem with unleaded green petrol of the kind that most of us use.

Baroness Vadera: My Lords, I fully understand the issue about rural Scotland. As I said, this is a matter for the Scottish Executive, who I understand have taken special note of the fact that resupplies are needed—although supplies are in fact more intermittent so, perversely enough, there is a bit more time.

With regard to the products, if it will assist the noble Lord I can have a quick look through the list I have: petrol, diesel, kerosene and jet fuel, gas oil, fuel oil—and then it goes into the petrochemical feedstock of a petrochemical refinery, which is on site. A number of products come out of that refinery, so far as I can tell.

The Earl of Caithness: My Lords, I am grateful to the Minister for repeating the Statement. I agree with the noble Lord, Lord Redesdale, that this could potentially be a threat to the economy, particularly the rural economy. A 48-hour strike is not a problem, although if it drags on it will be a serious problem for us. I am glad to report from my latest information that everybody in Caithness seems well stocked, which is due largely to the presence of a major supermarket in the town of Wick. They certainly have contingency plans and do not need to panic at the moment. That is good news.

However, it is the rural areas that again need attention. I could not help but smile when the noble Baroness said that most rural areas were supplied by barge. Trying to get a barge into the Highlands of Scotland—up

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Lairg or somewhere like that—is an interesting thought. It is not the case. There are various ports such as Wick and Thurso to which petrol and other fuels are delivered. But getting it from there to the really rural areas is the issue. The price of petrol is important. I was heartened by the Minister’s response on that. When I was in her position, the brief from the excellent fifth cavalry sitting in the box was: “It’s a matter of supply and demand, not for the Government to interfere”. I am glad that the Government are taking a slightly stronger view on that, which I hope is conveyed also to the Scottish Executive.

The Minister did not answer the point of the noble Lord, Lord Redesdale, about North Sea oil. Perhaps she could go into that in a little more detail. It is critical. It is not just the oil coming from the North Sea, but all the industries related to it. Many people in Aberdeen and in Caithness work in the North Sea sector.

The Minister mentioned jet fuel in responding to the noble Lord, Lord Steel. We have talked about the motorist, but not about aviation fuel. Could there be a problem with aviation fuel for places such as the Hebrides, Orkney and Shetland, or Caithness? If there is no aviation fuel, and we cannot get the limited number of flights in, we will have a serious problem. I hope that the Minister will say something about that, too.

Baroness Vadera: My Lords, I thank the noble Earl for correcting me. I certainly did not want to imply that barges go into rural areas; I simply meant that the restocking is done in that way. Nor would I wish to imply that we were going to interfere with pricing, although we are being very vigilant about security of supply. There was an impact of just over $2 on the price of crude oil yesterday, but that was due in part also to disruption in Nigeria—this is how the market works—and it has been corrected slightly, with the price back down to $115 today. I do not wish to give the impression that we will interfere in the event of the price reaching a certain level.

The four major airports are well stocked with jet fuel, and it is believed that the smaller airports also are well stocked. We completely take on board the points made about the impact that could be felt on North Sea oil, given that Grangemouth is responsible for about 700,000 barrels a day. A short, 48-hour strike would not have a significant impact. The processing plant would certainly have to be shut down, but if it is able to access low-pressure steam, for example, it can restart reasonably quickly. It is a matter of the time that it would take. That is why we have made very clear our views on ensuring that there is no significant impact.

The noble Baroness implied that this was about the whole of the United Kingdom and not just Scotland. Supplies in England are not being affected at all. There are seven or eight other refineries. Northern England is being supplied through other refineries, as is Northern Ireland, so the strike is not at this stage having an impact outside. I will certainly ensure that the Scottish Executive are completely aware of noble Lords’ strength of feeling about ensuring supplies in rural Scotland.

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Earl Attlee: My Lords, I apologise to the House and to the Minister for not being present at the start of the Statement. The noble Lord, Lord Steel, referred to the problems with the supply of derv. This problem is known to be worldwide; there is a lack of refinery capacity to produce enough diesel. What have the Government done in recent years to encourage the UK industry to address that shortage? If we had addressed that problem, we would not have the problems to which the noble Lord, Lord Steel, referred.

Secondly, oil refineries are part of our critical national infrastructure. Does the Minister agree that the loss of one oil refinery should not be a problem for the economy? We should be able to survive quite happily despite losing one oil refinery. Does she agree that that is the case?

Baroness Vadera: My Lords, as I have already indicated, the temporary loss of production in that one refinery is not having an impact on the whole economy. There are other refineries and this is a very international market, both for crude and for oil products. So while it might have an impact on price it is not having an impact on the national economy. However, it does have an impact on Scotland, given the fact that the whole infrastructure is built over the past 60 years around that one refinery.

There is a regime in place to incentivise refining diesel. We consult on that regularly and I should be happy to write to the noble Earl with the information from the relevant department, which in part is the Treasury.

House of Lords (Members’ Taxation Status) Bill [HL]

4.46 pm

Lord Oakeshott of Seagrove Bay: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved accordingly, and, on Question, Motion agreed to.

House in Committee accordingly.

[The DEPUTY CHAIRMAN OF COMMITTEES (Lord Geddes) in the Chair.]

Clause 1 [Taxation status of members of the House of Lords]:

Viscount Astor moved Amendment No. 1:

The noble Viscount said: I shall speak also to the other amendments in my name. I was unable to be here at Second Reading but I have read carefully in Hansard what was said. I shall say at the outset that I do not think that the Bill should go very far. I do not think that it should leave this House. The Bill that is being promoted in another place is a more satisfactory answer to the issue and the whole thing should be wound up in the debate when we consider how this House is reformed in future. I do not think that we can just pick one thing.

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The noble Lord’s Bill brings up some interesting issues that are worth exploring. I find it extraordinary that a party that is so keen on Europe and everything European and which has not put down a single amendment to the Bill on the Lisbon treaty wants to prevent anybody who sits in this House from living perhaps part of the time in France or Italy, or wherever it may be in the European Union, and then attending this House. If we take the fact of the European Community as it is, one should be able to do that. I see no reason why, in theory, one should not do that.

We can stand for the European Parliament and we do not have to live in this country to do that. I remember that the noble Lord, Lord Steel, stood for the European Parliament in a seat just outside Rome—

Lord Steel of Aikwood: It was the whole of central Italy.

Viscount Astor: No doubt he had an extremely interesting time canvassing the various hostelries around the whole of central Italy. I am sure that he had an overwhelming vote, but I seem to remember that he was just pipped to the post by a local. However, he did not have to establish residence or domicile in Italy at that stage.

The Bill also excludes anyone who lives in the Channel Islands or the Isle of Man, as I do not think for tax purposes that they count as being resident or domiciled in the United Kingdom, although there seems to be no reason why, if you live there, you should not be able to serve in this House. Many people have done so in the past. If you take this theory even further, we must ask what about civil servants? Are they going to be asked to be resident and domiciled in this country before they accept the Government’s money? What about all those who sit on government quangos and accept the Crown’s payment for doing so? It seems that we go down a dangerous route.

I am all for people paying their taxes in this country. I have no interests to declare. I think I have always been domiciled here; that I have always been resident here; and that I have always paid far too much tax here. I do not think that I have ever been to Luxembourg, or wherever it is—if I have, I have certainly never noticed it—and I do not have a bank account there. It seems to me that there is also a philosophical difference and, indeed, a legal difference between residency and being domiciled. You can be resident in this country without being domiciled. There are Members of this House who are not—

Lord Lea of Crondall: I thank the noble Viscount for giving way. He mentioned Luxembourg, which is obviously not the same place as Liechtenstein. Before we continue the debate, would it be useful to have a map of Europe so that we can see where all these places are?

Viscount Astor: The noble Lord is probably better at his European geography than I am, whether it is Luxembourg or Liechtenstein. No doubt he will be able to tell us all about it if he so wishes.

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There is a definite legal difference between being resident and domiciled. There are Members of this House who were born in another country, who have arrived here and are resident. They do not necessarily know whether they are domiciled here because you have to have lived here for a certain number of years before you are officially domiciled. They may be paying full tax while they are here, but it does not mean to say that anybody has actually formally told them whether or not they are domiciled. I am not a tax lawyer, but I am not sure that works as part of the noble Lord’s Bill. The noble Lord is much better trained in the world of finance than I and will be able to tell us how these interesting issues work. However, it seems extraordinary that a party that is so keen on Europe is not going to allow anybody in this House to live in Europe and to come here. I beg to move.

Lord Selsdon: I hope that I may be forgiven for intervening but I am pleased with the gentle light-hearted way with which this has begun. In the Recess, having worked in these areas for many years, I found myself being approached by a number of non-nationals who had growing concern about the situation in the United Kingdom. It is sufficiently serious to ask for certain reassurances. The problem arises probably in press comment, but it was said that this particular Bill was going to be fast-tracked though the House of Lords. I believe I was told that that was because it was a statement from the Liberal Democrat party. That, for people who understand the British system, is no problem, because they know that the legislation has to go to the House of Commons; but there are those who do not and think that Bills end up in the House of Lords and then receive Royal Assent. That is quite worrying.

Your Lordships may not think this is important, but as we go on and as the matter develops, I will try to demonstrate to your Lordships that since the Bill was introduced there has been what one may call a series of material adverse changes in attitude to politicians and to law in this country, which could have a major detrimental effect on the economy. Therefore, I begin by asking a few questions of the noble Lord, Lord Oakeshott, and others, to which the noble Lord can well reply. He has solid financial background and has always been open in everything that he has done.

The first question is: is everything accurate and true that he is reported in Hansard as having said? I found two spelling mistakes, but people have been taking this apart. That is the first question. I have a series of questions; they are not unfriendly.

Lord Oakeshott of Seagrove Bay: I am having some difficulty following the relevance of some of these points to the amendments under discussion. I am happy to answer at the end, but I am not going to pop up and down like a jack-in-the-box. I will listen to the noble Lord making his speech and then reply.

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