30 April 2009

S3M-4006 Economy [Opening 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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The Minister for Transport, Infrastructure and Climate Change (Stewart Stevenson):

I congratulate the Liberals for lodging the motion and giving us the opportunity to debate an important subject. The Scottish Government is concerned about increases in fuel duty, which affect our rural communities and businesses throughout Scotland. That is why our parliamentarians at Westminster voted against rises on Tuesday night. I congratulate Mr Rumbles's colleague Robert Smith for voting against the fuel duty rise, and I hope that the debate will provide the Liberals, who voted every which way on Tuesday night, with an opportunity to clarify their overall position.

Liam McArthur: I am interested in the minister's point about voting patterns, as the SNP MPs did not vote against the September rise. The fuel duty regulator would have done nothing to the premium that is paid for petrol in the Highlands and Islands. The fuel duty rise was also irrelevant to it.

Stewart Stevenson: I make it clear that we will support the motion in Liam McArthur's name. We are open to any effective way of addressing the problem.

There is a substantial volume of letters flowing between us and other parties on the subject. My colleague, the Cabinet Secretary for Finance and Sustainable Growth, wrote to the Chancellor of the Exchequer on 14 November highlighting what had been done in France using derogation, and commented that

"By applying for this derogation the UK Government could reduce the tax on fuel borne by consumers in rural Scotland, including the islands."

However, the chancellor seems to think that administrative barriers would get in the way. He said in his reply of 27 November that

"The process of drawing the boundaries of any fuel duty rebate area would be extremely complicated."

It is quite simple. We have already done it. There are 149 filling stations in Scotland that we suggest should be considered for such a derogation. They are defined as being very remote, which means that they are at least 60 minutes' travel away from a community of 10,000 or more. That is 45 per cent of our filling stations. They are all low-turnover rural stations that are vital to the communities in which they operate.

Jeremy Purvis (Tweeddale, Ettrick and Lauderdale) (LD): Will the minister give way?

Stewart Stevenson: I am sorry—I do not have time, in my short speech.

The bottom line is that there are aspects on which we have broad sympathy with the motion, which gives us the option to consider a range of ways forward. We should be sensible and pragmatic and exclude nothing. I hope that the debate will draw together across the Parliament consensus that there is, although there is a range of options available, the necessity for action. If derogations can be applied elsewhere, it should be possible to do so in the UK. By the way, a proper scheme would also benefit filling stations in other parts of the United Kingdom, such as Cumbria, the south-west of England and Wales.

We provide various supports to transport for our remote and rural communities, particularly ferry services. We are bearing the fuel price risk for many ferry services, which at least insulates communities from that risk. We are also conducting a substantial trial on the road equivalent tariff. We have seen some local reports, which I have not yet personally verified, that the fuel price difference between the Isle of Harris and the mainland has shrunk substantially mainly because the RET means that new tankers are carrying fuel to Harris in competition with some of the incumbents.

There are things happening and we are doing things. We have carried out initial work on how a derogation might apply in Scotland and we continue to explore options for going some way towards offsetting the current differentials. However, I am afraid that the UK Government is remarkably intransigent and inflexible in respect of considering options. Therefore, I hope that that the Parliament will unite—and that the Labour Party will join the other parties which are, so far, indicating a broad consensus on the subject—to find a way forward that will benefit rural dwellers throughout the UK and—fundamentally—those whom we represent in Scotland.


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