Transport, Infrastructure and Climate Change Committee, 24 Nov 2009

Meeting date: Tuesday, November 24, 2009

Official Report 289KB pdf

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Petition

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Rural Fuel Prices (PE1181)

Item 4 is consideration of a petition. I draw members' attention to the paper that accompanies PE1181, which notes that the United Kingdom Government has stated clearly that it does not intend to pursue the reduction of fuel duty in remote and rural Scotland as called for by the petitioner, who asks us to urge the Scottish Government to make further representations to the UK Government. The Scottish Government has undertaken to continue to pursue the issue with the UK Government and we have been provided with the Scottish Government's response.

I welcome Alasdair Allan, who has joined us for this item.

Do members have any comments on the petition?

The committee needs to take forward the issue in some way, because the evidence from throughout Europe shows that we have the highest tax and one of the lowest before-tax costs for diesel, for example. We must find a way of investigating how it might be possible to put people in Scotland at less of a disadvantage. However, I would rather hear what other members have to say first because fuel prices are a huge problem in the area that I represent.

I understand that the issue of fuel prices is a huge problem for people in the area that Rob Gibson represents, as it is for people in other areas and for various industries. However, what the petition calls for is not something that the Scottish Parliament can do. The petition has been considered and we have asked the Scottish Government to do something, perhaps through lobbying, but we have no power to insist that the UK Government does anything about the issue. I appreciate where people are coming from, but I cannot see what else we can do with the petition.

As Cathy Peattie said, there are limits to what the Scottish Parliament or the Scottish Government can do, however much we might want to take a view that is different from that of the UK Government.

It seems to me that there are three aspects on which we could write to the Scottish Government. First, we could simply restate our expectation that the Government will continue to raise the issue with the UK Government, including with ministers who are subsequently appointed as a result of a general election or the ministerial changeovers that happen from time to time. A new perspective in the UK Government might make it open to looking again at the issue.

We could also ask the Scottish Government to consider a couple of matters that are within its remit, which could reduce the burden. The second aspect about which we could write to the Government is how we support demand reduction in relation to heating or fuel for diesel generators—many remote communities still use diesel generators. If there were more support for demand reduction for heating and electric power in homes and businesses, costs could be reduced.

The third aspect is the cost of transportation of fuel, which was noted as a secondary cause of increased prices. People's reduced negotiating power when they buy in smaller volumes could be considered by the Scottish Government, which might facilitate co-operatives, or co-operation on a larger scale, to enable remote areas to pool and increase their negotiating and buying power. There is action that the Scottish Government can take in its devolved remit to start to reduce additional financial burdens.

I am interested in what you said and I support your suggestions. There is no doubt that in rural Scotland the cost of fuel is a significant issue. I have long supported calls for a derogation of the sort that is proposed in the petition. However, I accept that on the whole the matter is reserved, as Cathy Peattie said. The committee should focus on recommending action that the Government in Scotland could take to make a difference. I have no problem with asking the Government to continue to make representations to the UK Government, but we cannot pursue that angle much longer.

Convener, thank you for giving me the opportunity to speak. The petitioners would have attended the meeting but it was too expensive for them to come. They have indicated that they are happy for me to say something.

The petitioners have made it clear that they appreciate that tax is a reserved matter. If the committee is to do anything, they would like it to acknowledge the problems that are faced by people in remote places such as Scotland's island communities and to align itself with the view that the UK Government should do something about that.

Tax is an important factor. I filled up my tank yesterday in Harris at a cost of £1.19 per litre—that was at one of the cheaper places; in parts of Uist the cost was £1.22 or £1.23, compared with £1.08 on the mainland. It is clear that tax is part of the issue. However, as the convener said, another part of the issue concerns suppliers. When a company that supplies fuel to Lewis was threatened with competition, the threat brought down the price of petrol by several pence in one day. However, that has not happened in other islands, where a monopoly still applies. It is interesting that the company to which I refer was not able to provide representatives to speak to the Scottish Government about the matter.

The issue has very human consequences. People have told me at my surgeries that they are caught in a benefits trap because they cannot afford to drive to work. Whether or not the matter is reserved, I think that the petitioners are keen for the committee to acknowledge that there is an issue and to state its view.

Do you want to come back in, Rob?

I do indeed.

On the question of volumes, which the convener raised, I think that the petition raises certain issues that we could investigate or which the Government could be asked to look into. Diesel for fishing boats has been dispensed by Highland Council at its Lochinver office, and the bulk buying of that fuel, which I suppose was meant to ensure that the west coast ports were used, was a way of keeping down costs. Why could that model of local authorities acting, if you will, as wholesalers not be applied in other areas? Obviously, questions about storage would arise, but I think that we should take a very serious look at bulk supplies. After all, if it is proving difficult to have competition in certain places, having bulk storage would at least be a way of cutting initial costs, but we need to know whether such a move would be possible within the law. In any case, I do not see why we should not ask the question now.

First, do members agree to write as a matter of courtesy to the petitioner with the correspondence that has been received to date?

Members indicated agreement.

I suggest that we write again to the Scottish Government. I think that it is fair enough to express our grave concern at the on-going situation and one particular company's apparent inability to make available representatives even to discuss the matter. We should also reiterate our expectation that the Government will continue to raise the matter with the UK Government and ask what has been done to explore options that might exist under devolved powers to reduce demand for fuel for electricity and heating in domestic and business premises or to find renewable transport options through biofuels, electric vehicles and so on. Obviously, that latter option will not apply to fishing boats, but many other businesses might be able to cut their costs with such an approach. We should also ask about opportunities for increasing negotiating power through local authorities, co-operatives or some other vehicle. Is that a reasonable course of action?

Members indicated agreement.

Do you have anything to add, Alasdair?

Perhaps a bigger issue than the inability to deal with large volumes is the unavailability of competition in some places. However, I want to put on record that tax is definitely a factor. The situation is having very human consequences in areas that do not have any viable public transport alternatives. As much as I support such alternatives, the fact is that they are simply not there.

Indeed.

In agreeing to write to the Scottish Government on the basis that I have outlined, do members also agree to close the petition?

I do not think that we should. If we are seeking answers from the Government, we should bring its responses back to the committee for further discussion. I do not think that the issues raised in the petition have been answered. It is certainly not dead; in fact, the proposals that you have outlined open up a whole new area that needs to be developed.

I have no problem with keeping the petition open but, as an ex-member of the Public Petitions Committee, I have to say that I have a problem with raising expectations that we cannot meet. I take Rob Gibson's point and acknowledge the difficulties of this situation; however, the tax issue that Alasdair Allan has highlighted does not fall within the committee's remit and it does not help anyone to suggest that we go down that road. I am always a bit concerned for petitioners whose petitions are kept open when it looks like there might be no solution to them.

As I said, I am not saying that we should definitely close our consideration of this petition. I suggest that we keep it open but tell the petitioners that we do not wish to raise any false expectations that anything will happen quickly.

I thank Marlyn Glen for that comment. Although the petitioners have not been able to make it to this meeting, I am sure that they are watching us or will read the Official Report.

They are definitely watching us.

It is also probably fair to assume that they are well aware that the tax system is reserved and that, even if the will was there, there are limits to what the Parliament or the Scottish Government can do about such issues.

Given that we are writing again to the Scottish Government, it would be reasonable to consider the reply on the agenda as part of our consideration of the petition. We should therefore keep the petition open until we have received the Government's response but I must point out that, at that stage, we will have to recognise that we cannot do anything else about the tax issue and that we should expect to close the petition. Are members agreed?

Members indicated agreement.