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We have been debating the changes in duty on ultra-low sulphur petrol and the temporary reduction in duty on unleaded petrol. We now come to amendment No. 6, which deals with the period for which the reduction in duty on ordinary unleaded petrol is to apply. In his Budget statement, the Chancellor announced that the Government intended to match the reduction in duty on ultra-low sulphur petrol with a reduction in duty on unleaded petrol for a temporary period. The amendment would extend the period during which that reduction applies from 14 June this year--the date fixed by the Chancellor--to the end of the current financial year, 5 April 2002.
Given the Government's plans, hon. Members may find 14 June an interesting choice of date. We are tempted to ask about the magic of 14 June. Where does that date come from and what is the rationale behind it? Why has 14 June been plucked from all other dates as the day on which the concession on ordinary unleaded petrol will end? Why is it necessary to end it then? It is clear that, on 14 June, any ordinary unleaded petrol on sale to the
I shall resist the temptation to talk about stealth, but we need more of an explanation of where 14 June comes from. Given that the price of petrol in this country is relatively high because of high fuel tax, which we have just debated, and given the ominous pressures in the world oil market, which were adverted to by Members on both sides of the Committee in the previous debate, the last thing any motorist using that type of petrol wants is a further increase in its price on 14 June. I suspect that any motorist who pays that extra duty on 14 June will get an unpleasant shock; on top of the already high price that he is paying, he will find himself paying an extra 2p a litre in duty.
We are told in the concluding words of that statement that Ministers expect that ultra-low sulphur petrol will form virtually 100 per cent. of the petrol supplied to the United Kingdom, but we know all too well that, in this field as in so many others, what Ministers expect to happen does not always come to pass. Indeed, in the previous debate we had some interesting questions about what Ministers expected in the past which did not receive an answer.
In any case, whether or not ultra-low sulphur petrol is supplied to the motorist is not in the hands of Ministers, as Ministers admit. A Minister in the Department of Trade and Industry told my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady) in a written answer on 16 November last year:
If it is the Government's case that the concession on unleaded petrol should end when ultra-low sulphur petrol constitutes 100 per cent. of the petrol supplied in the UK, why should not the date for the ending of the concession be moved from 14 June to 5 April next year? Why should there be any question of whether or not the deadline of
If that is the Government's position, why do they not extend the deadline to April next year? If the deadline is not extended, is there not the risk that some motorists who fill their tanks on 14 June will get the unpleasant shock of an extra 2p per litre on top of the already high price that they are paying, and on top of whatever else they may face at that time by way of petrol price increases? We need an explanation from the Minister.
As matters stand, there is the risk of an extremely unpleasant shock for many motorists on 14 June. Just when they have been told by the Chancellor that there was a reduction of 2p in the price of unleaded petrol on 7 March, hey presto--the 2p goes back again on 14 June. What is going on?
Mr. Matthew Taylor: When the proposal to which the amendment relates was made, Conservative Front Benchers argued that it was likely that the petrol companies would not succeed in getting ultra-low sulphur fuels on to the forecourt in all parts of the country in time to meet the deadline. It was argued that the deadline was therefore arbitrary and unfair to those who might not otherwise be supplied with the correct form of fuel.
I listened intently to the comments of the hon. Member for Hertsmere (Mr. Clappison), as I assumed that he would give the House some evidence to show that that problem was now materialising, but I noticed that he was unable to cite one example or to quote any association or organisation in support of his argument. A little earlier, my colleagues spoke to the RAC Foundation to ask whether it believed there was a problem. It said that it believed that there would be no problem in obtaining ultra-low sulphur fuels. The problem on the basis of which the amendment was tabled therefore appears to be non-existent. Opposition Front Benchers cannot give any examples, and people who are in the know argue the contrary of what they are saying.
The principle of the provision seems to make sense. It is about getting the big petrol companies to supply a fuel that not only causes less pollution in its own right, but will allow the supply of higher-efficiency engines that use less fuel. Such engines are already being used in Japan. As they use less fuel, they will emit less carbon dioxide, so the fuel will also help in meeting the Kyoto targets.
Mr. Clappison: The hon. Gentleman is endeavouring to defend the Government--we are used to seeing Liberal Democrats do that--but in doing so, he has not answered the very point that I put to them. Why is 14 June specified, rather than 5 April next year, if it is intended that the ultra-low sulphur petrol reduction should be matched by a temporary reduction in respect of unleaded petrol until there is 100 per cent. coverage?
Mr. Taylor: There is a simple answer to that question, but I must respond first to the hon. Gentleman's initial argument: I am defending not the Government but the environment. If there is a way in which we can help to protect the environment and to move towards the Kyoto targets, I believe that we should use it. On the particular element of policy in question, that is what the Government
Why should there be an early deadline, whether it happens to be in June or July? I am sure that it fitted in with the Government's election programme. They were rather lucky, in terms of foot and mouth, that it remained within that programme, but the principle of a tight deadline is correct anyway. We know from experience that the oil companies refused to introduce ultra-low sulphur fuel, on the grounds that it was too costly to do so. As a result of the price differential, we now see that they could have done so very quickly all along. Indeed, that is exactly what we are seeing now.
A big question mark must be placed over the oil companies' willingness to make the investment that they needed to make without the price differential. Provided that the time scale is achievable, the earlier the deadline, the earlier the companies will supply all petrol stations with ultra-low sulphur fuel. As soon as that happens, manufacturers can introduce the engines that rely on such fuel. The environmental benefits that they bring can then be achieved, so a tight deadline makes sense. If the hon. Member for Hertsmere could provide evidence to show that an extra month or two months, or, indeed, the period until April next year, would make all the difference and allow something to happen that would not otherwise be possible, he would be advancing a perfectly coherent argument. The truth is, however, that he can sustain no basis whatever for arguing for postponement until next April.
The only difference on the matter between the Conservative and Labour parties--dare I say it?--seems to be the date when they would like the election to occur. The Conservative party would like it to take place as late as possible, and no doubt the Government would like it to happen as early as possible. It seems peculiar, in terms of the general election, that the Government picked the specified date; and if we can assume Conservative Front Benchers are still in favour of an indefinite delay in the general election because of foot and mouth, their amendment precisely matches their election timetable.