15 April 2010

S3M-6142 Fuel Prices (Opening Speech)

Scottish Parliament

Thursday 15 April 2010

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

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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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