15 April 2010

S3M-6142 Fuel Prices (Closing Speech)

Scottish Parliament

Thursday 15 April 2010

[The Presiding Officer opened the meeting at 09:15]
... ... ...
Fuel Prices

The Deputy Presiding Officer (Alasdair Morgan): The next item of business is a debate on motion S3M-6142, in the name of Liam McArthur, on fuel prices.

... ... ...

Stewart Stevenson:

The debate has had running through it a strand of agreement on the definition of the problem. I do not think that anyone has suggested that there are not problems in rural areas. That at least gives us a consistent basis on which to argue about what some of the solutions might be.

Agreement on the solutions is perhaps less widespread, but there is a consistent thread. Alex Johnstone highlighted the fact that, in 1997, the price of fuel was 61p a litre. As I look round the chamber, I think that I may be the only member present who remembers when it was half a crown a gallon.

Charlie Gordon: I remember when lager was half a crown a pint.

Stewart Stevenson: Mr Gordon should not pretend that he is the same age as me and that he remembers that—it seems somewhat unlikely.

The fair fuel stabiliser that the Tories have proposed at least has the merit of providing an opportunity for discussion and debate. I note that Murdo Fraser said that there would be consultation on that idea. Ultimately, we should coalesce around whatever can be shown to work. That is the important thing.

Alex Johnstone mentioned that, according to road haulage interests, in essence the problem is the price of fuel and the volatility of that price. It is likely that we all agree on that. He highlighted the fact that independent filling stations have less buying power. That is where Duncan McNeil failed to grasp the nettle in relation to rural areas when he spoke about possible amendments to the planning system to increase competition. On many of our islands and in many of our remote communities, the issue is not competition. There is simply not the volume to support multiple outlets, and there never will be.

Duncan McNeil: I fully accept that. I made it clear that I was making a plea for the situation that urban communities face to be addressed. When will the Scottish Government respond to the Competition Commission's recommendation? Does the Scottish Government intend to progress it through planning legislation rather than competition legislation?

Stewart Stevenson: I will come to that in a minute, but I want to finish my remarks on what Alex Johnstone had to say. We did indeed vote against the Conservative amendment to the Liberal Democrat motion for the debate to which he referred on the basis that, as Liam McArthur described, it appeared to move the issue from centre stage.

I thought that Charlie Gordon was rather unwise to talk about the weakness of the pound making a significant contribution to high prices when the weakness of the pound is, of course, a reflection of the weakness of the economy over which the Labour Government has presided. We accept that there are global difficulties, but relative differences affect relative valuations of currencies. The pound has sunk against the dollar. That tells us that, in relative terms, the UK Administration has been less effective in engaging with the world's economic problems.

Charlie Gordon talked about my role as transport minister. It is a great pleasure to stand before members as the UK's longest-serving transport minister. There is a sense of déjà vu—we have had the reference to skinning a cat on previous occasions.

Mike Rumbles correctly made the important point that in rural areas, the purchase of fuel for cars and for goods transport is a necessity and not the luxury that the purchase of beer might be.

Reference has been made to the correspondence between John Swinney and Alistair Darling. I will quote from Alistair Darling's letter of 9 April, in which he said:

"different fuel duty rates for some parts of the country would be administratively burdensome both for fuel sellers and for the Government."

I do not think that that shows a willingness to engage constructively to solve the problem of rural fuel prices, as has been done elsewhere in the European Union. It can be done: if the Greeks can do it, I hope that the UK Government can do it.

I turn briefly to the competition issue that Duncan McNeil raised. One of the great difficulties of saying when planning permission is granted that a filling station may be operated only by, for the sake of argument, Shell, because BP runs all the other filling stations in the area, is that that would reduce the economic value of Shell's investment, because it would be forbidden from selling the filling station to another operator. In saying that, one would make development less likely. However, if one is blind to the company that makes a planning application—that is a principle of the current planning system—there is nothing to stop the planning permission being transferred to someone else. That would be the case even if account were taken of the company that made the application.

It is important to understand that refining costs are the same, wherever in Scotland fuel is sold.

It has been a good debate, in which we have been united in defining the problem in a similar way. Rural areas of Scotland have substantially higher fuel prices than urban areas do. I hope that the debate has illuminated some of the issues and opportunities that exist, and that all members will unite with political colleagues in other jurisdictions in their efforts to remedy the situation.


S3M-6142 Fuel Prices (Opening Speech)

Scottish Parliament

Thursday 15 April 2010

[The Presiding Officer opened the meeting at 09:15]
... ... ...
Fuel Prices

The Deputy Presiding Officer (Alasdair Morgan): The next item of business is a debate on motion S3M-6142, in the name of Liam McArthur, on fuel prices.

... ... ...

The Minister for Transport, Infrastructure and Climate Change (Stewart Stevenson):

I assure Parliament that we can make common cause on the issue with our colleagues in the Liberal party. Liam McArthur talked of a rural fuel derogation, which is a broad term that encompasses a range of possible options. Let us not become unduly fixated on how to do that—let us unite around the principle that it must be done.

Jeremy Purvis (Tweeddale, Ettrick and Lauderdale) (LD): As with transitional relief?

Stewart Stevenson: Despite Mr Purvis's unhelpful intervention—he appears to have forgotten that the previous debate has been completed—let us unite around the idea that duty should be reduced.

Jeremy Purvis: I make a serious point to the minister. If he says that the principle is to have overall support for a derogation, why cannot the same principle of overall support apply to transitional relief for other businesses that are affected, which include rural petrol stations? Such relief would have an impact on precisely those businesses.

Stewart Stevenson: Mr Purvis knows that the small business bonus scheme has delivered benefit to 66,000 businesses throughout Scotland. No party and no previous Government have made the efforts that we have made to support small businesses and particularly to benefit businesses in rural areas.

I return to fuel duty. I welcome the fact that Liam McArthur has initiated the debate again, although I regret that it appears to be an annual event. We have yet to see movement by the UK Government to recognise the concerns in remote rural and island areas of Scotland about the effect of fuel duty and of high fuel prices on those communities. As I said in the debate in April last year, the issue affects the people of Cumbria, Northumbria, Cornwall, Devon, Wales and other parts of the United Kingdom. I am sure that they will be interested in what we say.

As Liam McArthur said, as a high proportion of our population lives in rural and remote areas, the effect on such communities cannot be overestimated. A disproportionate burden is placed on households and businesses, particularly in these difficult economic times.

Liam McArthur acknowledged that we have again recently engaged by letter with the UK Government. He should not imagine that our engagement is limited to an exchange of letters. We regularly meet and have telephone conversations with ministers from the UK Administration. The subject is raised on a wide range of fronts and forms part of the dialogue that ministers for a range of portfolios present in speeches and at meetings with a wide range of people.

Writing to the chancellor is of course important to put formally on the record the need to reduce the fuel price differential between urban and rural households and businesses throughout Scotland.

Liam McArthur: It is helpful that the minister sets out the representations that have been made, but does he accept that the direct response to SPICe from Scottish Government officials was that the letter of 14 November 2008 was the most recent representation that the Government had made on the issue?

Stewart Stevenson: I am certainly happy to explore why SPICe had that view, but Liam McArthur should be aware that not all correspondence between the Government and the UK Administration is necessarily or routinely put before SPICe. I am happy to ensure that members are well aware of our activity on the subject and I hope that the debate and my speech have provided clarity.

It is important to examine the evidence of the disparity in fuel pricing between rural and urban areas. Mr McArthur is of course aware that a disparity of about 10p exists between prices in Kirkwall and in Glasgow. That varies from day to day and week to week, but it endures and is of that order. Similarly, the Western Isles and the Shetlands have large burdens from the cost of fuel.

The purchase of beer was referred to. I am sure that that is more expensive in London, but it is a voluntary purchase, whereas the provision of fuel for vital rural services is not a discretionary buy for businesses or people who must travel to their work and transport themselves around. Throughout Scotland, we must all consider whether every journey is necessary. However, when the public transport options are fewer—as they inevitably are in rural areas—fewer journeys are discretionary and more are necessary, so more are affected by the high taxation regime.

The latest letter to the chancellor, which was sent on 19 March, asked him to reconsider his decision not to take corrective action through the tax system. Any derogation of whatever character—be it that proposed by the Conservatives or by us or the Liberals' variant—would do if it delivered the result. I am not partisan about that. A derogation would make a difference and put rural areas on a more equal footing with urban areas, which would reduce the competitive barriers of high fuel prices.

The chancellor's latest rejection has let down thousands of households and businesses in remote parts of Scotland that face high fuel costs, despite the actions—to which Liam McArthur referred, as other members no doubt will—that have been permitted throughout the European Union in places where national Administrations have made and argued the case for them. I refer, in particular, to the example of Corsica, an island that is greatly affected by high fuel prices and is now benefiting from the actions of the French Government.

With the price of petrol having risen by 27 per cent in the year to March 2010, it is important that we get the early action that is needed. There has been a change in the way in which increases are phased, but there will still be increases. It is time for action. On behalf of my party, I will support the Liberals' motion and my amendment.

I move amendment S3M-6142.2, after second "mechanism" to insert:

", including consideration of a fair fuel regulator".


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