Fuel Duties

Oral Answers to Questions — Scotland – in the House of Commons at 2:30 pm on 17th July 2001.

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Photo of Owen Paterson Owen Paterson Conservative, North Shropshire 2:30 pm, 17th July 2001

What representations she has received about the effects of fuel duties in Scotland.

Photo of Mrs Helen Liddell Mrs Helen Liddell Secretary of State, Scottish Office, The Secretary of State for Scotland

I have regular discussions with a number of interested parties on a wide range of issues affecting Scotland, one of which relates to fuel prices.

Photo of Owen Paterson Owen Paterson Conservative, North Shropshire

That was a bland answer, considering that 95 per cent. of goods in Scotland are transported by motorised truck. How many letters has the Secretary of State had from businesses whose competitiveness has been crushed by the pernicious fuel duties imposed by the Government? Can she name three businesses in Scotland that have been made more competitive by those fuel duties?

Photo of Mrs Helen Liddell Mrs Helen Liddell Secretary of State, Scottish Office, The Secretary of State for Scotland

I would point out to the hon. Gentleman that the Government have introduced a package of measures that is specifically friendly to motorists in Scotland. The measures introduced by my right hon. Friend the Chancellor of the Exchequer in the Budget have led to cuts in fuel duty of 4p per litre for motorists and 7p a litre for hauliers. Those measures benefit every business in Scotland.

Photo of Mr Calum MacDonald Mr Calum MacDonald Labour, Na h-Eileanan an Iar

My right hon. Friend will be aware that the Office of Fair Trading is investigating the causes of the disproportionately high petrol prices in the Western Isles, which are not due to taxes or duties, because the same taxes and duties apply everywhere else in the United Kingdom. They are the result of a commercial interest. Will my right hon. Friend ascertain when the findings of the Office of Fair Trading inquiry will be published, and undertake to implement them?

Photo of Mrs Helen Liddell Mrs Helen Liddell Secretary of State, Scottish Office, The Secretary of State for Scotland

I will certainly undertake to do that; my hon. Friend makes an important point. Having filled my tank on Saturday at a rural filling station in the highlands, I am well aware of the difficulties being experienced in the highlands and islands. My colleagues in the Scottish Executive have introduced the rural petrol stations grant scheme, which is intended specifically to assist filling stations in remote areas. I know that my hon. Friend welcomes that. I undertake to ensure that the findings of the survey of petrol prices will be published as early as possible.

Photo of Mr Peter Duncan Mr Peter Duncan Conservative, Galloway and Upper Nithsdale

Is the right hon. Lady aware of the direct threat to the economy of Wigtownshire? She will be aware that many hauliers and holidaymakers detour via the Irish sea crossing to southern Ireland en route to Northern Ireland rather than cross my constituency to Stranraer, because they can buy fuel at half price in southern Ireland, rather than paying the extortionate price of £4 per gallon in Galloway and Upper Nithsdale.

Photo of Mrs Helen Liddell Mrs Helen Liddell Secretary of State, Scottish Office, The Secretary of State for Scotland

I take this opportunity to welcome the "Westminster one" to the Chamber. Let me not diminish the hon. Gentleman's considerable achievement in winning his seat. However, does his win not say something about the performance of the Scottish National party, which still managed to lose a seat on one of the worst nights for the Tories in a generation?

What the hon. Gentleman says about the difficulties in Wigtownshire is something that I acknowledge, and that my right hon. Friend the Chancellor of the Exchequer acknowledged when he introduced the new system of vehicle excise duty, especially the development of what is called the Brit disc. That is specifically designed to assist hauliers and give them access to fuel at a competitive rate that will allow them to carry out their business without a competitive disadvantage.

Photo of Michael Weir Michael Weir Scottish National Party, Angus

Does the Secretary of State understand that the high price of fuel impacts on all aspects of the Scottish economy, especially in rural areas? Does she think that taking 75p in tax for each pound charged on petrol is too much, too little or just right? Is there a European Union country that takes more in tax on petrol than the United Kingdom? May we have a straight answer at least once this afternoon?

Photo of Mrs Helen Liddell Mrs Helen Liddell Secretary of State, Scottish Office, The Secretary of State for Scotland

As the hon. Gentleman is a new Member, I feel that one should be understanding about the questions that he asks. However, if he checks the level of motoring taxation in Scotland with that in the rest of the EU, he will find that we sit in the middle. Opposition Members talk about fuel taxes, but they fail to take into account any consideration of the environment. Perhaps that explains why, with the exception of Mr. Salmond, they have all been returned to this place with roughly 30 per cent. of the popular vote.

Photo of Michael Connarty Michael Connarty Labour, Falkirk East

Does my right hon. Friend share my concern that although when the barrel price of oil was $10 there was not a large fall in the price of petrol at the pump, now that the price is $25 a barrel, the companies are claiming that that is why their price cannot come down at the pump? Will my right hon. Friend enter into discussions with the companies about how much profit they are making from the international sale and retail of fuel? While she is at it, will she get them to explain why fuel is 3p a litre cheaper in her constituency than in mine?

Photo of Mrs Helen Liddell Mrs Helen Liddell Secretary of State, Scottish Office, The Secretary of State for Scotland

I assume that my hon. Friend is a regular visitor to my constituency, given that his family comes from there. The Government do not become involved in companies' pricing decisions. However, I recognise my hon. Friend's point about prices at the pump when oil was $10 a barrel. As the Grangemouth refinery is in his constituency, he is well aware of the important impact on the Scottish economy of having a more sustainable oil price now. It is important to secure jobs in my hon. Friend's constituency and in other constituencies throughout Scotland. The Government believe that competition, and competitive pressures on oil companies, are one sure way of reducing petrol prices, as we see with pricing in supermarket and hypermarket filling stations.

Photo of Eleanor Laing Eleanor Laing Shadow Spokesperson (Education)

I listened carefully to the Secretary of State's answer to my hon. Friend Mr. Duncan, who is very welcome indeed at Scottish questions, especially by my colleagues and me. The right hon. Lady has admitted that high petrol prices are causing a problem for rural businesses, farmers and other people in rural communities—especially in Scotland, by comparison with the rest of the country. As those prices result from taxation, not from the original pricing, will she undertake to make representations to the Chancellor before the next Budget to reduce, or at least hold steady, the current tax on fuel?

Photo of Mrs Helen Liddell Mrs Helen Liddell Secretary of State, Scottish Office, The Secretary of State for Scotland

I take this opportunity not only to welcome the hon. Lady to the Dispatch Box—we did not expect to have her company today—but, on behalf of the whole House, to give a welcome to Matthew Wallace Laing, who is now five weeks old. We are delighted to see the hon. Lady here and looking so well. On her substantive point, the Government have recognised the difficulties of rural communities and others, which is why my right hon. Friend the Chancellor has taken action resulting in an average reduction of 4p a litre for petrol.