30 April 2009

S3M-4006 Economy [Closing Speech]

Scottish Parliament

Thursday 30 April 2009

[THE PRESIDING OFFICER opened the meeting at 09:15]
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The Deputy Presiding Officer (Alasdair Morgan): The next item of business is a debate on motion S3M-4006, in the name of Liam McArthur, on the economy.

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Stewart Stevenson:

It has been an interesting debate, although the final remarks from the Labour benches have created a shared sense of mystification among the other political parties because, suddenly, we seem to be hearing the Labour Party arguing for a derogation scheme. There is more joy in a sinner who repenteth, and so on—if repentance is what we heard. We will perhaps have to examine the Official Report very carefully indeed.

I will try to deal with a number of the points that members have made in the debate. Fuel duty derogation is a matter that engages the European Union, and is therefore is a matter on which the UK Government needs to represent Scotland's interests. However, it would also be representing the interests of rural areas throughout the UK—we would be equally pleased if other places were also to receive that benefit.

Elaine Murray said that the tax on fuel is income generating. Indeed it is. It is probably one of the things that are keeping the fragile UK economy afloat. With fuel duty currently at 54.19p a litre, we can see the scale of the revenue. Of course, there is VAT on top of that. That raises an interesting little question. If the prices are higher, the VAT take is higher. I have done a back-of-an-envelope sum. I am happy to have someone tell me that my sums are wrong, but if there is a 20p difference in price, the increase in VAT take, curiously enough, is almost exactly the 2.4p that we require to put into the system under the derogation that the Liberals talk about in the motion.

Therefore, the people who are collecting the extra tax on rural communities through the existence of a higher price are precisely the people who have that extra money to feed back and reduce the prices. That is precisely why we cannot allow Westminster off the hook. Westminster is getting the financial and fiscal benefit of higher prices through the tax system. I would be happy if Westminster were to remit that extra money to the Scottish Parliament, for us to deal with. That might be a proposal—we will see in due course.

Lewis Macdonald: Does the minister accept that the higher tax on petrol and diesel in island communities is a result of the higher price and not the other way around?

Stewart Stevenson: That is self-evident. However, the point remains that if there is a higher tax, there is a higher tax take for the Westminster Government. It has the money that could fund derogation.

Of course, that is not the only thing that Lewis Macdonald and other Labour members said. In a rather incoherent contribution on fuel prices, Lewis Macdonald said that because fuel prices in Kirkwall today are lower than they were at their peak in Aberdeen, everything is okay. I do not see many nodding heads round the chamber, but that is what he actually said.

Lewis Macdonald: I hope that the minister will check the Official Report very carefully, because he will find that that is far from what I said. I pointed out to him that the critical issue on fuel prices was, first, the price of crude oil, and, secondly, how that price was passed on to consumers. The price for consumers throughout Scotland is a good deal less now than it was a year ago. Surely that is the critical point, and therefore the issue of differential price is one that the minister and his devolved Government ought now to address.

Stewart Stevenson: The differential price is the issue that we are debating. However, I am absolutely clear that Lewis Macdonald made that comparison. It is a comparison for which he will have to account to others.

Lewis Macdonald encouraged us to follow the good example of the Prime Minister and the chancellor—two individuals who have led the United Kingdom into a position of debt greater than at any time in a generation, and greater as a proportion of gross domestic product than anywhere in Europe. If we look for examples of how to conduct ourselves in public finances, I suspect that few would wish to follow the example of the chancellor and the Prime Minister, and that many would wish to look elsewhere.

Lewis Macdonald said that reducing prices runs counter to climate change reduction. Of course, what he is actually saying is that those who have the highest prices should pay the biggest price for climate change, yet they are the very people who have the fewest alternative transport options. I do not think that that commends his argument to members.

I very much support the motion.


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