Small Independent Garages

Oral Answers to Questions — Oral Answers to Questions – in the House of Commons at 12:00 am on 14 July 1980.

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Photo of Mr Alastair Goodlad Mr Alastair Goodlad , Northwich 12:00, 14 July 1980

asked the Secretary of State for Trade what progress the Director General of Fair Trading has made in considering the representations from the Motor Agents' Association and others about the behaviour of large oil companies to small independent garages.

Photo of Mrs Sally Oppenheim Mrs Sally Oppenheim , Gloucester

I am aware of the widespread concern among hon. Members and others on this issue, to which I, too, attach a good deal of importance, and the Director General is well aware of this. Meanwhile, he has also received representations from the major oil companies disputing the statements by the Motor Agents' Association. He is weighing all the evidence before reaching his decision, which he tells me he will be announcing soon.

Photo of Mr Alastair Goodlad Mr Alastair Goodlad , Northwich

Bearing in mind that nearly 10,000 petrol stations have closed over the last 10 years—nearly all of them independents, many of them in rural areas—is my right hon. Friend satisfied that fair competition prevails in the trade? In particular, is she satisfied that the recent fall in the spot price of petroleum will be passed on by the oil companies to consumers?

Photo of Mrs Sally Oppenheim Mrs Sally Oppenheim , Gloucester

As my hon. Friend will be aware, vigorous competition in the petrol market has led to a welcome drop in petrol prices at many garages. It would appear that this has been triggered by those independent garages that buy petrol on the spot market, so there is no shortage of competition. I agree, however, that, as well as price, choice is an important factor. Like my hon. Friend, I would be very concerned if there were evidence that a large number of garages were going out of business because petrol was not available, but there is no evidence of that.

Photo of Mr Leslie Spriggs Mr Leslie Spriggs , St Helens

I use my car quite a lot at weekends on parliamentary duties. During last weekend I took the trouble to check at a number of garages the prices that are being charged for petrol. At one garage it was £1·36·9 per gallon, at another it was £1·37·9 per gallon. Is that a reduction in price, or is it an increase? What will the right hon. Lady do about it?

Photo of Mrs Sally Oppenheim Mrs Sally Oppenheim , Gloucester

It is clear that the hon. Gentleman's researches in the matter were not as thorough as my own, since I found petrol on sale for £1·29 a gallon. Obviously, consumers will patronise those garages that offer petrol at the lowest price. It is competition that has brought about the prices at the lower end of the market and given consumers the opportunity to buy cheaper petrol.

Photo of Sir Peter Emery Sir Peter Emery , Honiton

Does my right hon. Friend realise that when major oil companies begin talking about streamlining and rationalisation of distribution, that more often means streamlining and rationalisation for their benefit, to the detriment of small garages and of the country community, who need them? Will she, therefore, see the submission that has been put in by the major oil companies so that she, too, can make a judgment on this matter?

Photo of Mrs Sally Oppenheim Mrs Sally Oppenheim , Gloucester

Yes. I share my hon. Friend's concern about this matter. It is important that rural garages should continue in existence. My hon. Friend will understand that some always buy their petrol on the spot market. Therefore, they will always be vulnerable. If there were evidence that the major oil companies were not keeping to their agreement to maintain supplies to their present licensed dealers I should be very concerned, and the Director General is particularly aware of that.

Photo of Mr Ioan Evans Mr Ioan Evans , Aberdare

Is it not true that under this Government the price of petrol has risen from 75p a gallon to about £1·30? That is a tremendous increase, 20p of which has been imposed by the Government in taxation. Is not the closure of smaller filling stations in rural areas working against the conservation of energy, in that motorists have to travel far greater distances to fill their tanks?

Photo of Mrs Sally Oppenheim Mrs Sally Oppenheim , Gloucester

As I have already said, there is no evidence that the smaller rural garages are having difficulty in obtaining supplies. Should that evidence come forward, and should the existence of the smaller garages be threatened, I should be extremely concerned. The Director General is well aware of my views on this subject.

Photo of Mrs Peggy Fenner Mrs Peggy Fenner , Rochester and Chatham

My right hon. Friend will be aware, from correspondence that I have had with her, that there appears to be some inexplicable delay in commencing this investigation by the Director General. Will she make it clear to the Director General that this is a matter of urgency, because although at present there is a buyers' market in this commodity, the fact remains that with a finite source we know that it will not continue? I fear that the small independent garages might find themselves in the same situation again, which has caused them all to write letters to the press.

Photo of Mrs Sally Oppenheim Mrs Sally Oppenheim , Gloucester

I sympathise with my hon. Friend's argument, and I assure her that there is no delay. Evidence has to be submitted by both sides. The Director General has to wait until all the evidence is gathered before he can reach a decision. I am assured that that decision will be forthcoming shortly.

Photo of Mr John Fraser Mr John Fraser , Lambeth Norwood

The right hon. Lady is aware of complaints about discriminatory discounting and the price of petrol on motorways. Does she intend to do anything about those matters?

Photo of Mrs Sally Oppenheim Mrs Sally Oppenheim , Gloucester

The Director General can act under his powers in the Competition Act. That is precisely why those powers were given to him.