Fuel Costs

– in the Northern Ireland Assembly at 4:00 pm on 18th September 2000.

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Debate resumed on motion:

That this Assembly expresses its concern at the escalating price of fuel and calls on the Chancellor of the Exchequer to take measures to lessen the impact of high fuel costs on the economic well-being of Northern Ireland and its people, and to encourage other EU member states to bring their tax on fuel into line with that of neighbouring countries to allow fair competition and to discourage the illegal transportation of fuel across national boundaries. — [Mr Beggs]

Photo of Jim Wilson Jim Wilson UUP

This morning, Members quoted many statistics to support their contributions to the fuel debate. Had the subject matter been different, we would probably be bored by statistics by now. However, it is the sheer weight of evidence supported by the statistics that has made the debate on fuel so meaningful. There is no doubt that public concern is firmly focused on fuel prices. The price of diesel has doubled since the introduction of the fuel duty escalator in 1994. Twenty five per cent of the 60% increase since 1993 took place in 1999 alone. The last Budget opened the door very slightly by offering some help, although this still meant a 3·4% increase in duty. The Government, however, still failed to address the main issue of excessive fuel duty. Currently, excise duty on diesel is twice that which exists in any other European Union member state.

The United Kingdom has benefited hugely from the vast increase in oil prices. Revenues from North Sea oil, inclusive of VAT, must exceed all Budget predictions. Road hauliers believe that part of this windfall should be returned to the industry so that a degree of competitiveness can be restored. High fuel costs have a disproportionate impact on the road haulage industry, with fuel amounting to 36% of its total operating costs. The United Kingdom, and Northern Ireland in particular, depends heavily on an efficient haulage industry. Eighty one per cent of all domestic freight is carried by road. There are 65,000 businesses in the United Kingdom operating eight vehicles over 3.5 tons. There are over 25 million cars and 422,000 lorries over 3.5 tons. The UK’s fiscal regime has disadvantaged a once thriving industry. These fiscal policies are causing acute and irreversible damage to the industry.

In Northern Ireland, the majority of hauliers purchase their fuel in the Republic to enable their businesses to compete and survive. It is estimated that the total loss to the Treasury because of the refuelling of vehicles in the South and fuel smuggling is £350 million per year. The Government must, as the Government of the Republic have, recognise the economic importance of a strong and stable haulage industry. An accountancy firm has calculated that a windfall from rising oil prices means that the Chancellor of the Exchequer can afford to cut oil prices immediately by 8 pence per litre.

The Treasury receives £330 million per year for every dollar rise in the price of world oil. It is estimated that by 2002 tax lost to the Exchequer through vehicles refuelling outside the United Kingdom will amount to one billion pounds. The gap in diesel fuel prices between the United Kingdom and the rest of the European Union is now so huge that one might describe it as laughable, were the implications not so serious.

The policy of the Government, and the previous Administration, was to pile taxes on fuel when oil prices were so low that the impact on costs was blunted. Now that the world oil prices have been readjusted inevitably upwards, the United Kingdom has been exposed. The Government must act now to stabilise the situation and create a level playing field, particularly with regard to the Republic of Ireland and other European Union member states.

I will conclude with a simple illustration; I am holding five debit slips that represent five fills of fuel for my car and were made in Donegal, Cavan and Leitrim since July. That represents a saving to me of £55 or, in other words, a free fill of fuel. Multiply that by whatever factor is appropriate and you will see the enormity of the problem faced by our farmers, hauliers and fishermen. That simple illustration tells us much, and I support the motion.

Photo of Mr Danny O'Connor Mr Danny O'Connor Social Democratic and Labour Party

I support the motion. This morning, on the way to this House, I paid 85·9 pence for each litre of diesel. Further up the road, I saw a sign pointing into the yard of a farm-type building advertising diesel on sale for 68 pence per litre. We are told that there is only 2 pence per litre profit on diesel so how can these people possibly sell it for 68 pence? It simply does not add up.

Earlier, Mr Dallat said that much of this is manufactured red diesel which has been chemically cleaned. That may be the case but we are told that there are something like 18 customs officers throughout Northern Ireland to deal with what is an ever-growing problem, and I find it difficult to understand how we are ever going to deal with this problem head on. This is a problem all over Northern Ireland, and I am sure that all Members will, at some point on their way home, see a sign that blatantly advertises diesel at up to 20 pence per litre cheaper than that in petrol stations. This has led to the closure of over 60 petrol stations in Northern Ireland together with the jobs that they provided. And, it is happening in areas where a petrol station can provide a rural community with a shop for essentials.

The first thing that we need to do is target the fraud aspect. I know that that is easier said than done, but the sale of illegal fuel has become so blatant that something must be done. We need to look at the situation and ask why people can be so blatant and get away with it.

Today a number of people from the road haulage industry and the agriculture industry came to Stormont to lobby Members. Most Members have received briefings from the CBI, the Anglo North Irish Fish Producers’ Organisation, the Ulster Farmers’ Union, et cetera, which are full of the statistics quoted earlier.

People care deeply about the situation. Mr Jim Wilson referred to the fact that 422,000 heavy goods vehicles are registered in the United Kingdom. That means 422,000 lorry drivers, not to mention the mechanics, transport clerks, fork-lift truck drivers, porters, and so on, needed to load and unload such vehicles. Those jobs will all be put at risk. We must send our products to Continental Europe, and if our transportation costs are so high that businesses are forced to use Continental transport in order to take them there, each one of those lorry-driving jobs could be taken by a European. They can buy their lorry and their diesel fuel more cheaply.

Our business depends very much on the road transport industry. Everything we make that is sent out to Great Britain or Europe goes by road, for we have no rail links with anywhere else. Things have to go by ferry and road. We are heavily dependent on road transport and the road haulage industry, and we must see that industry being supported by a reduction in fuel costs to ensure that we, in Northern Ireland, can get our products into the European market competitively.

We have talked much about motor fuel, but that is not the only fuel whose price has gone up. Mr John Kelly earlier referred to the cost of home heating oil, which has risen by over 100% in the last year or so. The most vulnerable people in society, those who have had their homes specially adapted to have oil — a non-manual heating system — installed for them because they were unfit to light fires, are now even more disadvantaged because of the high cost of heating fuel.

The British Government could afford to bring down the price of heating oil. It could, perhaps, also afford to bring down the cost of diesel to assist lorry drivers, but it is not just they who are suffering. Even ambulance services and the fire brigades are paying through the nose to provide an essential service to the community. We heard the Minister make a very welcome announcement last week that there would be an extra £50 to cover winter fuel payments. However, because of the cost of home heating oil, that is grossly inadequate.

In this country we have a disability living allowance, of which Members will all be aware by now. There are care and mobility components. The mobility component is given to those who need transportation, who simply cannot get from A to B without difficulty. We have now reached the stage where people receive mobility money; they have a car, but because petrol is so costly, most of them cannot afford to fill it.

The situation is getting worse and worse. Ms Morrice referred to our possible over dependence on oil, and that may well be the case, but that is the present state of affairs, and until such time as it changes fundamentally, I am afraid we shall have to live with it. I cannot see Gordon Brown changing things. Tony Blair came out in bullish form last week and said he would not be bullied.

Indeed, some of the oil companies were going to put their prices up again last week. The Government have got to the stage where they feel that because they have a majority, they can do no wrong. Some people within the Government are suffering from megalomania. They think that, no matter what they do, they are there forever. The people should tell them that they are not going to be there forever if they do not listen to what they want, and that includes our MPs in Parliament. The Government must listen. They have a duty to protect those people in our society who cannot afford heating oil, those who have to make a choice between heating and eating. It is not a nice situation to be in.

I support the motion and thank Mr Beggs and Mr Dodds for bringing it forward. This matter needed to be aired as it has been today. I hope the Government pay heed to the will of the Assembly, because Northern Ireland is a special case. We are disadvantaged because people can go across the border and fill up. A lot of jobs have been lost because of that. In supporting the motion, I want to say that people in rural areas, where there is a lack of public transport, are being forced to use their cars because they have no other choice.

Photo of Jim Shannon Jim Shannon DUP 4:15 pm, 18th September 2000

What made this protest on the mainland so different from other protests, such as the protest over the poll tax and the like, is that the people who were protesting were middle-class. They were not people looking for trouble or taking advantage of a situation; they were people with a genuine grievance. That was highlighted last week when the police moved in after a few days to let the tankers out. Some of the people questioned said "No, we will not be fighting the police, we are law-abiding citizens". That made this protest different from the others. The British Government, in this instance, fell down by not reacting positively to the comments and needs of the people and the points they were trying to make. If Tony Blair, "two Jags" Prescott and Gordon Brown do not take note now, they will find themselves in a very serious position at the next election, and that is what they should be considering.

Different groups from industry were there also: the farmers, the hauliers, and the ordinary people who drive their car to and from work. Indeed, the emergency services were greatly hampered as a result. We should be looking at the needs of the people here and at the fact that the protests were made in a disciplined and dignified manner.

I would like to highlight some of the different issues which impact on my constituency and on the people of the Province. Eighty per cent of the price of petrol and diesel purchased in garages goes straight into the coffers of central Government. While the United Kingdom has the most expensive diesel and petrol — and this is true of Northern Ireland especially — people in Belgium and other countries benefit from paying the correct price for fuel. This is the real problem: the Government are making so much off the backs of the people here from petrol and diesel taxes. We must try to reduce that, but how? Perhaps this motion today will highlight the issue — the Government will have to take notice of it. They cannot ignore it. They cannot be arrogant, pompous or put their head in the sand and just ignore what is happening.

I would make two points. The first relates to the rural community, which I represent in the Ards Peninsula and in the Ards borough. It is very much a rural community, but it does take in some of the urban parts of the towns as well.

For many people living in the rural community the car is not a luxury, it is a necessity. It is important for those people who need it to get their children to school or who need to get to the shops. Indeed, some of those shops have closed as a result of the downturn in the agriculture industry. It is important that we focus on the impact on the rural community and how important the car is to them. Bus services do not always run at the time or to the place they would like, so the car can be their only way of getting about.

The second point relates to the fishing industry. We all know about the dire implications for the fishing industry and we have highlighted issues in this Chamber before, as has the Minster. The fishing industry has experienced a downturn in the last six months and especially since the beginning of this year. While new quotas have come in from Europe, we have also seen restrictions on where people can fish. We have seen the directives coming through and which are tying up the boats.

We have seen decommission, indeed the only decommission that has ever taken place is in the fishing industry. We have clearly seen some of the issues that are important to the fishing industry. While Government and EU Directives say that people cannot take boats out, that they cannot fish in places they used to, the fishing industry now finds itself impacted by the fuel increase.

In the last few months, fuel and diesel for fishing boats increased by 50% — that is before you take the boat out of the harbour and before you pay the rest of your overheads. That is quite difficult for the fishing industry to take on board when it already feels the restrictions coming from Europe and elsewhere. Skippers must continue to purchase the necessary equipment to make businesses financially viable. At the same time, they are not able to compensate for the increase in diesel costs.

A boat going out to sea at the present time — probably for the week — will cost about £1,000 to fill with fuel. That is a large proportion of any catch that you might make before the end of the week. It represents a very serious obstacle to making a successful business. Neither the Government nor the Fisheries Division at Stormont, have ever made any real effort to stand up for the rights of fishermen. They have simply acted as facilitators of EU legislation, which if unchallenged — and up to now it has been — will see our industry put to the sword. At the same time, devolution has not seen any change in the industry’s fortunes, with the Minister, while well intentioned, failing to make the voice of local industry heard. We need a strong voice for the fishing industry, which probably employs between 3,000 and 4,000 people. Livelihoods in the villages of Portavogie, Ardglass, Kilkeel, Annalong and many other places are tied up in fishing. Many families’ lives and focus is on the fishing industry.

The French seem to be taking the lead in protesting against such behaviour and have made a number of moves to aid their fishing fleet. They have come up with a number of ideas. They have decreased corporation tax. They have decreased and taken away the landing duty and they have increased the benefits that can be given to fishermen and their families. While they are not directly subsidising the industry the French authorities are actively seeking a way in which to help the fishing industry, which is more than can be said of our Government and the Fisheries Division at Stormont.

I have written to the Minister indicating some ways whereby assistance could be given to the fishing industry. I hope she may be able to make some movement. We have warned, over the last few years, about the fate of the local fishing industry.

As another nail is put into the coffin of the fishing industry, these warnings continue to go unheeded, and the Government seem determined to destroy a way of life which thousands of people depend on. Today we have tried to illustrate the different facets of industry, economy and lifestyle in Northern Ireland and how the rural community has been affected by this issue. The fishing industry, I believe, needs help as well.

Photo of David McClarty David McClarty UUP 4:30 pm, 18th September 2000

Throughout the past three years we have heard numerous calls from the Deputy Prime Minister, among others, to step out of our cars and get on to public transport. No one can ridicule such a plea. It makes good economic and environmental sense for an individual to decide to use public transport, be it bus or rail. There is something to be said for travelling to work in comfort, at speed and on time. In Northern Ireland, however, we cannot afford such a simple luxury — quite literally.

The railways task force interim report on the future of the railway network in Northern Ireland clearly sets out the cost of establishing a decent standard of rail service in Northern Ireland for the foreseeable future. We are under no illusions, therefore, as to the desperate situation of our rail network. In the meantime, in the absence of such an adequate and needful transport facility, the car is the main, and in some parts of the country, the only form of transportation available. In many respects, petrol is the lifeblood of our nation. Our dependence on it is absolutely vital for the Province’s economy to function properly, and for us to lead fully communicable lives. The current high rate of petrol taxation means that everyone suffers. Petrol tax is a very tangible tax paid out of the pockets of all people, irrespective of their ability to afford it.

However, certain groups of people are hit hardest — farmers, fishermen, those who live and work in rural areas who have no other means of transportation but the car, industry and business. For many of these people, as was expressed in an article in the ‘Belfast Telegraph’ last Friday,

"The current rate of taxation on fuel is the difference between breaking even and going under".

Given the dual reality in Northern Ireland of poor rail transportation and inflated fuel costs, surely the Assembly has a valid argument in pressing the Chancellor of the Exchequer and the Prime Minister to take measures to lessen the impact of high fuel costs in the Province. The people’s "genuine and sincerely held grievances", to quote the Prime Minister, must now be listened to and acted upon.

Although we in Northern Ireland have not held protests like those in Great Britain, our grievances and concerns are just as great and equally valid, if not more so, than those across the water. We must press this point at the highest possible level in the Government during the following days and weeks if a positive outcome is to be achieved.

There are wider issues to be addressed. I thank Mr Beggs and Mr Dodds for highlighting these in the motion. We need to try to stamp out illegal smuggling of fuel across national borders, something that we can identify with in Northern Ireland. It would also be encouraging to see a fairer and more uniform petrol tax level throughout the European Union than currently exists. Then we might not see a repeat of the scenes that occurred in Great Britain and other European countries last week. Members of the House can and ought to combine our influence over these matters for the good of all the people of Northern Ireland. We want to see fairer fuel prices for ourselves as part of the United Kingdom and fairer fuel prices for the United Kingdom as part of the European Union. It is with this hope that I support the motion and ask others to do likewise.

Photo of Tommy Gallagher Tommy Gallagher Social Democratic and Labour Party

I support the motion. I speak as a representative of a border constituency. Border areas have been feeling the negative effects of the British Government’s tax on fuel for a number of years. For at least the past three years the signs have been visible of the damage that is being done to local economies.

We are aware of the debate that has been going on at European level for many years now about the particular problems of border areas and the need for measures to help such areas overcome peripherality and isolation. The British and Irish Governments, as well as many other Governments in the European Union, are committed to supporting the development of integrated and sustainable border communities.

The submission for Northern Ireland structural funds and the submission from the South, part of the national development plan, both contained a common chapter, which set out the importance of co-operation between the two Governments as well as co-operation at local level for the benefit of those areas.

The current wide differences that we have heard about so much here today in fuel taxes between the two Governments are undermining the commitments which the Governments have given at European level. This problem has been going on for three years in my county of Fermanagh. Forecourts are empty; almost all the small filling stations have now closed; most road hauliers have moved their businesses south into the Republic of Ireland; and more people have become unemployed as a result and that in an area like Fermanagh where traditionally there have been high levels of unemployment.

I want to refer to comments made earlier by Mr McCartney, the Member for North Down, about the high levels of smuggling and racketeering in south Armagh and Fermanagh. The smuggling of fuel, or anything else for that matter, and racketeering are not a serious issue in Fermanagh. Whether it is happening at all, I cannot say.

The very serious issue in Fermanagh is, as I have said, the drift across the border and the effects that that is having on the wider economy, and not least on agriculture. There is much dependence on agriculture in the border areas and, as references have been made to fuel prices, I want to point out that the fuel used for agricultural purposes, the red diesel, is now costing farmers 25 pence per litre. Over the last 12 months the increase on that fuel alone has been 150%, and that has happened at a time when farmers have been trying to cope with the problems and the difficulties that have arisen as a result of the BSE crisis.

This problem with fuel has been brought to the attention of the Governments in various countries. I just want to refer to a deputation of which I was part of, together with the MP for South Down, Mr Eddie McGrady, that went to the Chancellor of the Exchequer in 1999. We detailed to the Chancellor the problems at that time, and we asked for Government intervention. My council in Fermanagh regards this as a priority issue and has raised it with the present Secretary of State, but until now the Government have refused to help.

I hope that when today’s debate is finished they will take on board the serious situation that now exists for everybody in this community.

The common chapter that I referred to identified the common challenges facing the economies in both parts of Ireland. The solution to this fuel crisis requires a review of the British Government’s policy on fuel taxes in Northern Ireland. Is there a precedent for that? The Chancellor’s recent initiative offered tax incentives to small and medium-sized enterprises. Some of these tax incentives are of the order of 100%, and that measure shows that it is possible to achieve modifications in the existing tax regime.

Nothing is impossible with regard to finding a solution to this problem. I call on the Government to act now so that the discrepancies in fuel taxes between Northern Ireland and the Republic of Ireland are addressed. It will be in everyone’s interest — especially those living on the northern side of the border and along the border corridor.

Photo of Kieran McCarthy Kieran McCarthy Alliance

I support the motion. By this stage, everything that needed to be said has been said. However, I am delighted that the motion has cross-party support. Every section of the community has been affected by this issue. They continue to be affected by it, and they will be affected until it is resolved. Farmers, hauliers, petrol station owners and ordinary people who depend on fuel for heating and travel are affected. I hope that the people who can make a difference, namely the Prime Minister and the Chancellor of the Exchequer, will listen to the united voice of the Assembly. I also appeal to the Northern Ireland MPs to exercise their voice in Westminster and to try and get action to be taken so that this situation can be redressed sooner rather than later.

Photo of Edwin Poots Edwin Poots DUP

This is a very timely debate and I thank the Members who brought it forward. We have to understand how we arrived at this situation. The policy of this Government and the previous Government was to introduce a fuel escalator. The escalator was allegedly to encourage less people to use private transport and more people to use public transport. Mr McGrady indicated that it was the Conservative Government who introduced the escalator, but unfortunately the Labour Government decided to carry it on even though other European governments who had been using it saw that they had reached their peak and called it a day. Those governments, very wisely, stopped using the fuel escalator while the British Government continued to use it to raise the price of fuel.

Unfortunately, the Labour Government did not go forward with a two-pronged attack and also try to bring about greater use of the public transport system. Mr Prescott, after being in office for three years, has only recently brought out a document addressing the problems in public transport. Yet, we have had three years of the hiking-up of fuel prices.

Over the past five years, the number of cars on Northern Ireland’s roads has increased by 21% — approximately 125,000. Therefore, the fuel escalator, without also addressing the needs of public transport, does not work. The environmental reasons given for the fuel escalator were exposed last week as a great myth, and in the middle of the crisis Mr Blair said that the price of fuel could not be cut because the money was needed for the Health Service and the education service. That is true. It is not what the Government have been saying in previous budgets but it is a fact of life. Around £40 billion per year is used as a stealth tax — a tax that no one can see. People go to the petrol pump and the petrol pump acts as a tax collector.

That "stealth" tax is taken from the community, and it is not put back into transport, it is not put into roads, it is not put into railways or airports. It is put into other services, so that they can tinker about with tax at the other end of the regime and go to the electorate at the next election and say we have cut the rate of income tax by 2%, 3% or whatever. The fact is that they are taking more tax than ever.

In Northern Ireland, the Exchequer has lost millions of pounds. It is estimated that three-quarters of a billion litres of petrol and diesel are now imported to Northern Ireland. No tax is paid on that. Three-quarters of a billion litres equates to about £460 million lost to the economy. Furthermore, the service stations that would have been selling that fuel lose about £40 million that they would have made from it. On top of that, the services that they would have provided and the other goods that they would have sold are also lost to the British tax economy. That has resulted in a net loss to the economy in Northern Ireland.

There is also a loss to the economy in the United Kingdom as a whole. Lorry drivers all fill up their vehicles when they are in Belgium, Holland or France. They do not wait until they get back to the United Kingdom to fill up their lorries. They are allowed to carry 300 gallons of fuel in their tanks. As soon as they get close to the ferry port they fill up their tanks with diesel. Then they come over to the United Kingdom, do what they have to do and go back to the continent with their next load. Inevitably, they will fill up on the continent again. That means less tax coming into the British economy. The statistical evidence is that diesel revenue has actually been reduced as a result of high fuel prices in the United Kingdom.

The high fuel prices that the haulage companies are paying impact upon ordinary consumers: you, me and the people that we represent. The higher the cost of fuel to the haulage companies, the higher the costs that they will pass on to their customers. Their customers are the Safeways, the Tescos and the large shops in our community. They have to add that into the price of their goods, and ultimately the consumer has to pay more, whether it be in food, in clothing or whatever. They have to pay more as a result of the high fuel costs. The consumer is not only losing out in terms of driving, but in every other respect as well.

There are a number of ways in which this could be tackled. There could be an overall reduction in the price of fuel. A Member said earlier that if the Government reduced the price of fuel by 8p per litre, it would not affect the Chancellor’s public sector projections, because he had expected to gain an extra £4 billion in revenue from North Sea oil.

The other way would be to make the tax rebatable to VAT-registered companies, particularly haulage companies, because the haulage people are the ones who are suffering the most. We already have a regime wherein VAT can be reclaimed by the haulage companies and by legitimate businesses. Why can we not have a rebate on fuel costs to VAT-registered businesses? That would reduce costs for the haulage companies.

It is considered that some 85,000 people in the United Kingdom who were involved in haulage lost their jobs as a result of high fuel costs. That needs to be tackled. It cannot be left any longer. Mr Blair has been given 55 days to address it by the protestors in the United Kingdom, and it was clear that public opinion was with the protestors, not with the Government. They had lost touch with the people on this particular issue. Mr Blair needs to address this issue and bring fuel costs in the United Kingdom down to an acceptable level within the European Union. We are in a community where we are supposed to compete with the other countries on a fair basis, but it is difficult to compete on a fair basis whenever such a vital commodity has such an exorbitant price in comparison to the other member states.

Fuel is essential in Northern Ireland, both for the agriculturr community and for ordinary consumers. High fuel costs have a greater impact on Northern Ireland, because we burn oil in our power stations and over 50% of houses use oil-fired central heating. I understand that the current price of home heating oil is not due to the tax regime implemented by Gordon Brown — it is due to the high oil prices set by OPEC — but the Government could be doing more.

We have been imposing sanctions against Iraq for 10 years. It has been interesting to see those sanctions implemented. The forces that went in to deal with Saddam Hussein at that time did not finish the job. They have decided to punish the whole community in Iraq because of their leader. That has lead to the deaths of some 20,000 children through shortages of medicine and food.

The Government should be saying to the President of the United States, in particular, that it is time to review that situation. We should supply Iraq with more medical supplies, ensure that they have enough food to feed their children and, at the same time, allow them to sell more oil. There is an oil deficit throughout the world. That particular country has a food and medicine deficit. We should not starve the children of that country because they have an evil and wicked leader. The Prime Minister should be looking at that. That could significantly reduce the price of fuel. Our pensioners have to pay for home heating oil and our electricity companies have to pay to generate electricity. That is another thing that I would like to see the Government looking at.

I welcome this debate. It has been useful, and I hope that Westminster sits up and takes notice, not only of what the people in England, Scotland and Wales are saying, but also of what this Assembly, which represents the people of Northern Ireland, is saying.

Photo of George Savage George Savage UUP 4:45 pm, 18th September 2000

I welcome this debate. I support the proposals put forward by my own party and by the DUP. There has not been a person in the Chamber today who has not thrown their weight 100% behind this.

We have arrived at the point where everybody is repeating themselves time and again. I concur with what a number of people have said. There was a demonstration outside today by farmers and hauliers. It was brought home to me that we are going to have a late harvest. All the grain is going to have to be dried and there is only one way of doing that: by using oil. The cost of diesel is three times what it was last year. All the costs have doubled. Farmers have all that to pay, yet in the past two years their incomes have decreased by 17% to 20%. How can we expect people to keep their businesses running in a situation like that?

Northern Ireland depends very much on help from outside, for tourism example. The bed and breakfast and hotel industries depend on oil. They need all they encouragement they can get, instead of obstacles being put in their way. Obstacles have been put in their way through no fault of their own. These industries cannot create progress and prosperity when costs and overheads are driving them down. All these expenses have got to be clawed back from the people who come into this country: tourists. The price of home heating oil affects homes for the elderly. That has to be taken on board.

This is something that has to be taken on board. We are coming into winter and we have to make preparations to help the elderly. A lot of talk today was about the fuel escalator — that is all very well. But what long-term effects will this have on the economy of an already crippled industrialised business fraternity — a business fraternity that has suffered over the years because of the troubles? And just when we thought that things were about to move forward, we find ourselves again at a standstill.

I know that everybody in this Chamber will throw their weight completely behind this motion, but we have to take this further. I hope the Prime Minister and the Chancellor of the Exchequer take on board the seriousness of the situation, because if something is not done, the whole place will gradually come to a standstill. There are many areas that need an injection of finance. The crisis that is about to hit this country is unbelievable. I hope that the Government take heed of today’s protest by farmers and hauliers who are facing doom and gloom all the time.

This has been a worthwhile exercise by all involved and I only hope that the Government take heed.

Photo of P J Bradley P J Bradley Social Democratic and Labour Party

I have no doubt that the motion was tabled with every good intention, and I am pleased to have the opportunity to support it. But I fear that given the publicity that will follow this debate and all the figures that we have heard, even more hauliers, agriculture contractors and businesses that depend on fuel will go south for their supplies.

I checked one item this morning that allows me to give an up-to-date report on the scale of the problem. A litre of diesel north of the border is retailing at 87p, while a litre of the same fuel on the southern side is available at 65p, which, when converted, is 52p sterling — a difference of 35p per litre. Mr Dodds referred this morning to how talking of litres gives us a less serious view of the problem. The figures I have just quoted, when converted to gallons, demonstrate a price differential between North and South of £1.59 per gallon. One could be forgiven for thinking that £1.59 was the price of a gallon of diesel, but it is not. It is the difference between the price of a gallon of white diesel bought at the pumps in the South and one bought at a service station in the North. Please forgive me for repeating the price differential — £1.59 per gallon.

Last week hauliers and farmers in the Republic served notice on their Government that they are not going to tolerate what they view as an unacceptable fuel tax and, in world terms, greatly inflated fuel prices. I can only imagine what the additional repercussions here will be if the Taoiseach, Tánaiste and Minister McCreevy deal with their fuel crisis by reducing the prices in their jurisdiction.

I join the call from the Assembly for an immediate reduction of our over inflated fuel prices, responsibility for which rests firmly with the Prime Minister and the Chancellor and their fuel taxes. If this does not happen, our hauliers, our fishing industry, our agriculture and horticulture will just move day by day into a financial wilderness, from which they will never emerge. I welcome the debate and I support the motion. May I say to Mr Poots that the Government have 56 days, and counting down, to get their act together.

Photo of Lord John Alderdice Lord John Alderdice Speaker

I call the First Minister to respond on behalf of the Executive.

Photo of Rt Hon David Trimble Rt Hon David Trimble First Minister of Northern Ireland, Leader of the Ulster Unionist Party 5:00 pm, 18th September 2000

We considered it appropriate that in this debate, something should be said on behalf of the Administration. We do not have responsibility for taxation matters, but we do have a responsibility for relationships with other institutions. I want to apologise to the Assembly. Because of other business I was unable to attend the debate this morning, but I have listened to the debate this afternoon.

This is an important matter, and that importance has been underlined by the comments that Members have made. Last week we saw significant public protests across the water that had a significant impact on the supply of fuel. Similar problems did not arise in Northern Ireland. If they had, then a crisis management group, chaired by the head of the Civil Service, would have been activated by Ministers. It would have included all the permanent secretaries and would have reported to the Executive.

The crisis management group, and others, would have had to consider such matters as the deployment of Government staff and property, the allocation of responsibility for taking action — whether it be gaps, overlaps or uncertainties; the co-ordination of difficulties between organisations; public information issues; financial aspects of the response; the provision of immediate funding to meet special needs; the approval of emergency expenditure and the need for long-term funding for restoration and risk litigation. Had a crisis arisen, the nature of that crisis would have been somewhat different here in Northern Ireland compared to the rest of the United Kingdom.

It is important, in this context, to bear in mind that power supplies would not have been affected in the same way. Electricity generation here is dependent mainly on natural gas and coal. Coolkeeragh, the only power station running on oil, receives its supplies by ship, not by road. Obviously if difficulties had arisen in other means of transport, that would have had a progressive effect on industry here.

Consequently, we want to welcome the responsible approach that was taken by hauliers and farmers here. I assure them, and the community as a whole, that we do not underestimate the strength of opinion on this issue. Indeed, we were aware of the extent of the problem, and we have, over some time, been making representations to the Government about it. Last December, at the inaugural meeting of the British/Irish Intergovernmental Council, we made representations to both the British and Irish Prime Ministers. In addition, we have made representations to the Treasury, and there have been meetings at ministerial level on this issue.

Representations have been made with regard to the overall level of the fuel duty, which is too high in absolute terms, and the differential between North and South, which people have mentioned in this debate, is a considerable problem and we have also explored other possibilities, in particular, the way in which other assistance may be given to industry. The difficulty here is with regard to European community requirements on state aids and regional aids. We have been trying to explore these issues with the Government and will continue to do so. The unanimity in today’s debate, right across the political spectrum, can only enhance the weight of the representations that we have made and will continue to make.

It remains to be seen whether the Chancellor will respond by altering fuel duties in the next Budget, or whether he will offer some other compensation to hauliers and motorists through rebates, motor tax or licence fees.

I note the report in the press this morning, specifically in ‘The Times’, suggesting that the Chancellor is not minded to cut fuel tax. It is said that he is considering extending the fuel rebate scheme, used by the bus industry, to road hauliers as well as offering further discounts in vehicle excise duties. No matter what is done there, we will press for similar measures in Northern Ireland.

The position here is further complicated by evidence pointing to a high degree of cross-border fuel smuggling. That has put severe financial pressures on petrol retailers, particularly in border areas, and a considerable number of them who refused to deal in illicit fuel have closed down. We have met relevant Ministers on a number of occasions to press for measures to be taken to deal with this matter.

Because the Deputy First Minister and I were in the United States last week, we were unable to meet the representatives of the fuel crisis group. I am happy to say that our junior Ministers, Dennis Haughey and Dermot Nesbitt, did meet the group and discuss matters with them. We are very grateful to the group for the responsible attitude they and others adopted, and, consequently, for the absence of any major disruption to fuel supplies in Northern Ireland. We understand the difficulties faced by many industries, and we will continue to monitor the situation, make representations where we can and look at the implications for local industry.

The Home Secretary stated in interviews today that legislation will be introduced to put oil companies on the same basis as other utilities such as gas and electricity with regard to the continuity of supply, but he ruled out any immediate recourse to emergency legislation. Exactly the same emergency legislation is on the statute book in Northern Ireland, should it be needed to deal with these matters. If further legislation is introduced in England and Wales with regard to the regulation of utilities, we will consider whether there are any implications for us in Northern Ireland.

Photo of Roy Beggs Roy Beggs UUP

I welcome the apparently unanimous cross-party support for this motion. Some of that support came from surprising quarters, but I welcome it nevertheless. Many additional valid points were made by Members during the course of the debate, and while I do not need to respond to these, I would like to comment on some matters.

Those of you who are aware of the Newry and Mourne Hydrocarbons Traffic Order 1990 will know that it was introduced specifically to end fuel smuggling by Republicans in the Larkin Road area in south Armagh. If there has been a transformation by Republicans on the smuggling issue, I would welcome it; however, I will believe it when they and other paramilitary groups end smuggling and support the customs and excise officers and the RUC in enforcing the law.

Those who suggest that an all-Ireland economy would be a wonderful panacea should also bear in mind that this would mean a rise of 10% in our income tax and medical costs every time a person visited the doctor. Such a course of action, however, would not take account of the heritage and the political wishes of the greater number of people of Northern Ireland who wish to remain in the United Kingdom.

I also want to express my surprise at the lack of responsibility indicated by comments from SDLP Members. Balanced prices either side of the border would be required to end smuggling. It would be likely that these would be obtained by reducing fuel duty in Northern Ireland and increasing it in the Republic of Ireland, as has been suggested by my Colleague, Esmond Birnie. Instead, however, the SDLP talked about a vague concept of harmonisation, without acknowledging that the only way of achieving that would be for the citizens of the Irish Republic to endure some pain.

I would like to thank all Members who have spoken in support of the motion. This issue is likely to remain on both the short-term and long-term political agendas until fuel pricing disparity has been removed and the potential for profiteering by smugglers across the border comes to an end. I would like to assure this House and the various interest groups, who have held such a dignified and effective protest today, that it is my intention to continue to press this issue, both in the Assembly, where relevant, and in other Houses. I expect our Members of Parliament for Northern Ireland to continue to seek the adoption of the many worthwhile proposals which were made on this issue in the recent Northern Ireland Affairs Select Committee report and to press that with central Government.

It was a thorough report and some worthwhile comments were made. It can now be taken forward at Westminster.

I thank the First Minister for his response on behalf of the Executive, which illustrates that he appears to be well briefed on the matter. I urge Members to support the motion.

Question accordingly agreed to.


That this Assembly expresses its concern at the escalating price of fuel and calls on the Chancellor of the Exchequer to take measures to lessen the impact of high fuel costs on the economic well-being of Northern Ireland and its people, and to encourage other EU member states to bring their tax on fuel into line with that of neighbouring countries to allow fair competition and to discourage the illegal transportation of fuel across national boundaries.

Photo of Lord John Alderdice Lord John Alderdice Speaker

When a motion of this kind is passed, calling upon a Government Minister or other individual to take action, it is my practice to forward to the relevant person a note of the motion and a copy of Hansard. If there is a response, I will make it available to all Members.

Adjourned at 5.11 pm.