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Mr. Nick St. Aubyn (Guildford): I support the amendment. If there is an agreement to move to the new fuel and there is to be a transition period, it makes sense for it to be longer rather than shorter. Nothing that the hon. Member for Truro and St. Austell (Mr. Taylor) said contradicts that. An incentive exists for oil companies to invest in the new fuel if they know that at some point in the near future--next April is near enough--the regime will change. The way the Government are proceeding will lead people to feel that they have been conned. They will believe that they were given a fuel tax reduction that suddenly disappeared.

Logistics dictate that there are bound to be places where the new fuel will not be introduced by the beginning of June. Consequently, people will feel put out. However, if the Government are confident that the new fuel will be introduced across the board by the beginning of June,

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there is no harm in extending the deadline for the offer on the old fuel. A longer deadline is therefore a sensible and prudent step.

Mr. Christopher Leslie (Shipley): Clearly, the amendment would have an effect in terms of lost revenue. What would the proposal cost the Exchequer? Where would the money come from?

Mr. St. Aubyn: If I follow the logic of the views expressed by the hon. Gentleman's colleagues on the Liberal Democrat Benches, there are two arguments: either all the petrol stations will have the new fuel by June, thus entailing no cost to the Exchequer, or some stations will not have the new fuel, which underlines the purpose of the amendment. We await the Minister's response, but we may surmise that the oil companies have taken to the new measure with a will and that the cost to the Exchequer will be small. However, it will be significant for those who have to bear it.

My constituents already enjoy the benefits of the more environmentally friendly fuel. I am speaking not on their behalf but on behalf of the sort of community that the hon. Member for Truro and St. Austell represents. The additional cost of the fuel after June will bear far more heavily on the pockets of those in rural, more outlying parts of Britain, which are suffering so many burdens, than on the Chancellor's. We expect a Conservative Chancellor to be in office in June, and we will easily afford the item that we are considering out of the savings that we intend to make in running the Government.

I want to comment on the presumption behind the Liberal Democrat argument, and others that Labour Members have expressed, that there would be no demand by consumers for, or movement by oil companies towards, the new fuel without the tuppence reduction. First, the British people's political sensibilities have been insulted this evening. They understand exactly what lies behind the short-term dip in the enormous price of fuel. Secondly, their environmental sensibilities have been insulted. Consumers are environmentally conscious, and companies are responding to that. The idea that the tuppence reduction triggered the introduction of the new fuel is naive on the part of Liberal Democrat Members and calculating on the part of the Government, who try to claim credit for something that would have occurred anyway through consumer demand and the companies' development of new technology.

Mr. Matthew Taylor: The hon. Gentleman may know that I used to be the Liberal Democrat environment spokesman. In that role, I was approached by Japanese manufacturers who make high-efficiency engines. They argued for low-sulphur fuel in this country so that those engines could be used. I was also approached by petrol companies which argued against it because it would cost them too much to introduce. The reduction seems to have had the desired effect, and our argument cannot be characterised as naive, since the petrol companies made a case that was shown to be wrong.

Mr. St. Aubyn: In his long and varied career, the hon. Gentleman was even spokesman for England. I am therefore not surprised to hear that he was once the

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Liberal Democrat environment spokesman. I am not sure when he held that responsibility, but my point is that technology is moving forward.

We all have an interest in improving the environmental impact of the fuels and engines that we use. As new technology takes hold, the relevant companies will invest in supplying the new fuel. Their customers want them to do that. Customer and consumer demand drives the changes in our society, not the Government's pettifogging tax changes.

We welcome any reduction in fuel duty, and we will argue for its extension when we can, because fuel taxes in this country are far too high.

5.45 pm

Mr. Peter Atkinson (Hexham): It is a pleasure to follow my hon. Friend the Member for Guildford (Mr. St. Aubyn), who said that although the benefits of ultra-low sulphur petrol would be available to his constituents, he was worried about those in rural areas who would be unable to get it. Many of my constituents cannot get ultra-low sulphur petrol. I entirely agree with my hon. Friend's logic. However, I disagree with that of the hon. Member for Shipley (Mr. Leslie), because, if he is right, the extra cost will be borne by constituents such as mine who will probably not have access to that petrol by the due date in June.

I have checked today, and the Petrol Retailers Association tells me that two thirds of the country's garages are now able to supply ultra-low sulphur petrol. It is quite unlikely that the remaining third, including some of the smaller and more remote independent retailers, will be able to supply it by the due date in June. There will therefore be a problem of supply in those small country filling stations that are under so much threat, and customers in those areas will have to pay more.

Mr. Oliver Letwin (West Dorset): Will my hon. Friend join me in expressing the hope that the assurance provided by the Liberal Democrat spokesman might be tested by the hon. Gentleman's offering personally to meet the additional costs if there are any motorists who fail to get ultra-low sulphur petrol by the due date? If the hon. Gentleman is as confident as he maintains, should he not be willing to give the House that assurance?

Mr. Atkinson: I agree with my hon. Friend, and I shall certainly give way to the hon. Member for Truro and St. Austell to see whether he will give that assurance. I do not know what a Liberal Democrat cheque is worth, but a promise of something would be better than nothing. I am waiting, but I am sad to say that I do not think that the hon. Gentleman--

Mr. Matthew Taylor rose--

Mr. Atkinson: Ah! I give way to the hon. Gentleman.

Mr. Taylor: If the hon. Gentleman was listening to my earlier remarks, he will have heard me say that if the Conservative party could offer evidence of retailers who were unable to find ultra-low sulphur petrol, we would support an extension of the deadline. However, his Front-Bench spokesman has been unable to offer any evidence of that whatever.

Mr. Atkinson: As we can see, the money is not forthcoming. The hon. Gentleman would be a brave man

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if he were to take on that bet, because the chances of ultra-low sulphur petrol reaching all corners of these islands by June are remote.

We heard earlier about an explosion at a refinery in Houston, Texas. That has already prompted an increase in the price of petrol. One of the problems is that, with many states in the US now demanding cleaner fuel, the US is importing more and more fuel from Europe to meet that demand because it cannot produce it itself. British petrol companies were relying on an import of some ultra-low sulphur fuel from Europe to reach the targets involved in meeting the June due date. That petrol may not now be available to them, because it will go to the United States instead. In that case, there will be a considerable likelihood of the deadline not being met.

I would like to illustrate the problems and penalties of living in a remote rural area such as my constituency in Northumberland. Now that one of the small filling stations there has closed down, some of my constituents are faced with a round trip of 60 miles to fill up their car with fuel. That is a considerable burden. Furthermore, the prices charged by rural filling stations are already considerably higher than urban prices. The problem is that the smaller filling stations are not supplied by the major oil companies, which are currently engaged in a battle with the supermarkets. They have to buy their fuel from smaller, independent wholesalers who, in turn, buy it from the large oil companies. Those filling stations, therefore, face an extra stage in the wholesale market before they can start pricing their petrol.

Today, ordinary unleaded petrol costs the wholesalers between 77p and 80p a litre. They then sell it on to the independent retailers, such as the small ones in my constituency, who are faced with charging 82p, 83p or even 84p a litre. That is considerably more than the 77p or so that people currently pay in urban areas. If rural people cannot obtain ultra-low sulphur petrol, 2p will be added to the substantial additional burden that they must bear, which will make ordinary unleaded petrol in rural areas 10p or 12p more expensive than it is in urban areas.

According to the hon. Member for Shipley, if there is a loss to the Treasury it will be made up by my constituents. For safety's sake if for no other reason, I do not see why there should not be an extension. If the Minister does not like the suggested date of 5 April 2002, perhaps the date could be three months after 14 June 2001. That would be better for my constituents. [Interruption.]

This may seem funny to Labour Members. It may be a joke to the Parliamentary Private Secretary. Labour Members like to laugh during debates such as this, but we are not talking about politics now; we are talking about people living in country areas who--in the case of my constituents--are suffering a foot and mouth crisis and a tourism crisis, and may subsequently have to pay 10p or 12p more for their petrol. I do not consider that to be a laughing matter.


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