The final item of business is a members’ business debate on motion S6M-05607, in the name of Stuart McMillan, on Greenock and Inverclyde faced with higher forecourt prices than the rest of Scotland. The debate will be concluded without any question being put.
Motion debated,
That the Parliament rejects what it sees as the unfair fuel-pricing policy reportedly facing the people of Greenock and Inverclyde; understands that reports from BBC Scotland and the Greenock Telegraph suggest that forecourt prices in the area are significantly higher than in other parts of Scotland, including in more rural constituencies; believes that fuel retailers operating in Inverclyde have failed to acknowledge the impact of what it sees as a localised approach to pricing on people and businesses in the area, which, based on the Scottish Index of Multiple Deprivation (SIMD), ranks highest in Scotland for levels of deprivation; welcomes the announcement that the Competition and Markets Authority (CMA) will conduct a market study into the supply of road fuel in the UK; notes the view that changes are needed to prevent fuel retailers from charging significantly higher prices in one area compared to nearby locations; believes that reducing reliance on petrol and diesel vehicles is crucial, in light of the climate emergency; considers, however, that some people rely on their car for work or health reasons, and that purchasing a hybrid or electric vehicle, or using public transport, is not always an option; highlights what it sees as the vast profits being made by big businesses, including oil and gas companies; believes that this is in sharp contradiction to the cost of living crisis facing society that is plunging more households into poverty; notes the view that the UK Government must extend measures to help households, including through a cut in VAT and reduction in fuel duty; further notes the calls on the UK Government to act immediately, before autumn and winter 2022; notes the view that, if immediate action is not taken, the oil and gas sector in Scotland will carry a disproportionate burden of funding a UK-wide response to the cost of living crisis; notes calls on fuel retailers to reduce forecourt prices in Greenock and Inverclyde so that they are in line with the rest of Scotland, and looks forward to the CMA’s report into the supply of road fuel across the UK being published later in 2022.
17:24
I am pleased to have secured this members’ business debate, and I thank colleagues on all sides of the chamber for supporting my motion to allow it to happen. I also thank Daniella Theis from the Greenock Telegraph and India Grant from BBC Scotland’s “The Nine” programme for reporting on the campaign to get local fuel retailers to stop ripping off the people of Inverclyde.
Oil prices can be volatile and will always go up and down, and they have become even more unpredictable since Russia’s invasion of Ukraine. However, Tesco, Morrisons and BP have been ripping off my constituents since long before the war in Ukraine. The three companies continually claim that “local competition” is the driver for local fuel prices. Using their logic, it would seem that if one of them were to choose to drop its prices, its competitors would surely follow suit, and yet they do not.
The “greed is good” mantra clearly exists for Tesco, Morrisons and BP when it comes to the swindling of my community. I have attempted to engage with all three suppliers over many years. I acknowledge that, a few years ago, Morrisons accepted that its prices were too high and it reduced them, but that decrease has long since evaporated. I asked representatives from all three companies to come to Inverclyde to take part in a round-table discussion with interested organisations, including the local chamber of commerce, but all three refused. I have also written to the Competition and Markets Authority, and I welcome its market study, which is currently under way. It is a pity, however, that the CMA did not initiate such a review when I first wrote to it a few years ago.
I launched my #fairfuel watch campaign to highlight the cheapest garage locally in comparison with the cheapest garages in surrounding areas. The campaign generated a huge amount of discussion on social media, and people took photos of the cheaper prices at other garages to emphasise the extent of the unfairness. My constituents are furious, knowing that petrol at forecourts in Dunoon tends to be significantly cheaper than it is in Inverclyde, despite the fact that the tankers have to drive through my constituency and go on a ferry to cross the Clyde in order to service those forecourts. Fuel is cheaper even in Fairlie in North Ayrshire—once again, tankers have to drive through Inverclyde to supply those garages.
Since the launch of the campaign, it has become clear that garages in Inverclyde are consistently around 5p to 10p per litre more expensive than those in nearby areas. Recent figures from the Petrol Map website indicate that Inverclyde’s forecourts are now the most expensive in Scotland.
Most colleagues would normally consider that petrol stations in the Highlands and Islands—including in your constituency of Orkney, Presiding Officer—would be more expensive. The proof is there, however: Inverclyde is now the most expensive place for fuel in Scotland. When we consider that Inverclyde has the second highest local share of data zones among the 15 per cent most deprived areas in Scotland, and the highest local share of data zones among the 5 per cent most deprived areas, the situation becomes even more scandalous.
We can then add in the enormous profits that the oil companies are making. Between April and June this year, the world’s five biggest oil companies shared bumper global profits of nearly £50 billion, with BP reporting a global profit of £6.9 billion—its biggest quarterly profit in 14 years. Those eye-watering profits come as households face unmanageable energy bills, and reports from the BBC suggest that weekly road fuel prices in the United Kingdom have almost doubled since 2016.
It is not just fossil fuel companies that are profiting during the cost of living crisis. Tesco reported profits of £2.56 billion for 2021-22, which is up by 65.5 per cent in comparison with the previous year. For 2022-23, Tesco expects its retail-adjusted operating profit to be between £2.4 billion and £2.6 billion. Morrisons has reported a decline in profits, but it still managed to make £254 million in operating profits in 2020-21. Interestingly, Asda reported profits of £693.1 million for 2021—up by 42 per cent in comparison with 2020—and its forecourts are typically the cheapest of all of the supermarkets in Scotland. Although I do not wish to simplify the financial accounts of those big supermarkets, I believe that those figures show that they can offer lower fuel prices and continue to make profits—they just need the will to do so.
Many of my constituents travel to Govan or Linwood to fuel up at Asda, or to the Jet garage in Renfrew, because those garages are so much cheaper, and many also decide to do their weekly shop while they are outside Inverclyde. That highlights how cheaper fuel prices also translate into customer loyalty and decisions on where to buy groceries. Who knows: if the Tesco and Morrisons stores in my constituency reduced their fuel prices to make them more competitive, they might actually have more customer loyalty when it comes to grocery shopping.
I highlight the experiences of two of my constituents. A lady who has received a terminal cancer diagnosis contacted me recently about the cost of fuel. She is filling up outside Inverclyde when she attends specialist appointments in Glasgow. She wants to remain independent and travel to and from appointments herself. Furthermore, with her condition, it makes sense for her, where possible, to travel in isolation, as Covid-19 is still here. She went on to tell me about her friend, who is in a similar situation but has already cancelled her appointments as she cannot always afford to put fuel in her car.
How can it be right that cancer patients are cancelling appointments because they cannot afford the rip-off petrol prices that Tesco, Morrisons and BP are charging in Inverclyde? The stock answer—that they are being competitive locally—did not wash with people before, and it is viewed with even more disdain with every single passing day. Those companies have the power to help those two women, and many other people locally. They can keep people fuelling up in Inverclyde, rather than folk going 15 miles up the road to put fuel in their cars.
I have previously raised the issue of how social care workers and social workers rely on their own transport to visit people in their homes, and how rising fuel costs are eating into their already squeezed incomes. That is why I am calling on fuel retailers in Inverclyde to cut their forecourt prices immediately. Tesco says that “Every little helps”, and its current Christmas campaign says that it will “stand for joy” this Christmas. Meanwhile, customers can apparently find “More ways to save with Morrisons.” Why, then, will those companies not stop ripping off Inverclyde, and not lower their pump prices in my constituency?
I use the duck test: if it acts like a cartel, talks like a cartel and rips off my constituents like a cartel, I think that that says it all.
17:31
I thank Stuart McMillan for his fervent efforts to stand up for his constituents. I share the ethos behind a huge amount of what he had to say today in relation to the prices of petrol in our shared local area. I should declare an interest, not only as a diesel driver but as someone who fills up his car in Greenock quite regularly. In fact, Stuart McMillan makes a very good point—it is cheaper and easier for me to fill up my car in Edinburgh before I drive back to Greenock, and in doing so, I spend more money in that economic area than I do when I get back home. He makes a perfectly valid point in that regard.
I have done some research for the debate, and I will share feedback from some of the retailers that Stuart McMillan talked about. It is important to give them their say, so I will do so; that is not to say that I will not give them some criticism while I am at it.
It is up to individual retailers, knowing the market as it is, to set prices, based on a host of factors. Back in May this year, the then Secretary of State for Business, Energy and Industrial Strategy—I am sure that there have been a couple of them since then, but nonetheless—asked the chief executive of the Competition and Markets Authority to conduct an urgent review of the fuel market. Some of the findings that will come out of that review will be welcome, whereas some of the initial findings from the CMA have been more perplexing. It found that the wholesale price of petrol and diesel versus the retail prices had not actually contributed very much to the overall rise in prices; the so-called “retailer spread” was marginal. Indeed, over the years, we have heard many complaints that there is no money to be made in petrol, but that is clearly not the case in Inverclyde.
The CMA also reached the unusual conclusion that it believes that the supply of retail fuel—the differential in prices between rural and urban areas, for example—is relatively competitive, and that variations in the price of fuel, including pricing disparities, simply reflect the higher transportation costs and the lower volumes of petrol being sold: that is, supply and demand. I am not sure that I buy that entirely, but I hope that that piece of work continues and that some good comes out of it.
Of course, it is always very welcome when the Chancellor of the Exchequer makes his statement and there is any freeze in or cut to fuel duty; I think that consumers largely welcome that. The spring statement this year included a 5p cut to fuel duty across all rates, although I am not aware of any plans to change the rate of VAT on fuel. Nonetheless, it is clear from the most recent evidence that I have that things are not good. Let us look at some comparisons, starting with Tesco. To be fair to Morrisons and Tesco, they both responded to me when I asked for comment on today’s debate, whereas none of the other supermarkets did—if they have now done so, they are too late.
Tesco said to me that its policy is
“to be competitive on price locally”.
I think that we need to be very careful about what that actually means. Tesco says that it means that
“there can be a small price variance”
between two petrol stations when compared,
“if one is outside this local area.”
That concept of local price competitiveness is one that will crop up. Morrisons said exactly the same.
Will the member take an intervention?
Yes, if I can get my time back.
I think that we would all accept that small price variations can happen across any particular market. However, when price variations can range between 5p and 10p per litre with the same company, albeit in different local authority areas, that is clearly not a small differentiation.
Stuart McMillan is absolutely right. In fact, Tesco is a little bit misleading in saying that there can be “a small price variance” in its formal comment. I would like Tesco to listen carefully to the debate, because this difference is not small. Today, petrol in Kilbirnie’s Tesco costs 157.9p a litre. I do not begrudge the great people of North Ayrshire getting cheap petrol, but in Greenock a litre costs 172.9p.
The same goes for Morrisons, which said to me that it operates
“a local pricing policy on fuel and we aim to be competitive in each area we operate.”
That may mean that, in some cases, Morrisons is cheaper than Tesco in the competitive market in that localised area, but it does not explain in any way, shape or form the difference in prices between towns. Morrisons in Greenock was charging 172.9p a litre for petrol today, but Morrisons in Kilwinning was charging 161.9p a litre. That is a difference of more than 10p and the variance can be up to 20p.
We do not have a lot of time so I cannot go into the detail that I wanted to, but it is very clear that no one has offered any explanation. None of the retailers that responded to me, which I thank for responding, offered up the rationale behind those huge price disparities between one local area and another. North Ayrshire and Inverclyde are very close to each other. There is no good reason why the prices should be so hugely variable.
I conclude with the plight for island communities. The price of diesel on Arran today is nearly £2 and the price of petrol is in the high £1.70s. There are many issues around getting the supply of petrol to Arran. Cumbrae does not even have a petrol station; people have to get the ferry to the nearest petrol station. It is utterly bonkers.
We can criticise all Governments for not doing enough, but what we could do with seeing on our islands is more charging points for electric vehicles. We are absolutely failing both Arran and Cumbrae in the debate if we do not highlight that there are very few electric charging points in our island communities and that the charging point infrastructure is extremely poor. If we want to get people out of their diesel and petrol cars, surely we have to provide the infrastructure that is required to make that move to greener modes of travel.
Thank you, Mr Greene. It is always worth giving additional time for a plea for island communities.
17:37
I thank Stuart McMillan for bringing the debate to the chamber and acknowledge his work on the issue.
The cost of living crisis and, in particular, the rising cost of energy is having a real impact on working people. There is no doubt that the rising cost of filling up a car is impacting on households across the country, but few more so than those living in the towns and villages of Inverclyde. They are paying, on average, the highest fuel costs in Scotland.
The petrol map website that Stuart McMillan referenced earlier tells us that, today, the average price of petrol in Greenock sits at nearly 175p per litre, which is almost 10p higher than the UK average last week and 22p more than in a petrol station in Kilmarnock. That might not seem a lot for 1 litre, but, over time, it adds up to significant extra costs for local residents.
There are clearly global factors causing the increase in fuel prices, particularly the war in Ukraine, which will continue to result in relatively higher fuel prices for people around the globe. However, it is clear that there are substantial price differences within the country, too.
Of course, this debate is taking place during the 27th conference of the parties to the United Nations Framework Convention on Climate Change—COP27—and we must not forget the action that we need to take to tackle the climate emergency, which has been referenced in the motion. However, as I have said before in the chamber, in the context of the workplace parking levy debate, owning a car is not a luxury for many of our constituents; it is a necessity. Stuart McMillan made some really important points in that regard. There simply is not the integrated, affordable, accessible and reliable public transport that people need to get to and from their work and for other essential travel. Put simply, for many people in Inverclyde as well as other parts of Scotland, there is no public transport alternative to the car.
We must also recognise that we cannot wish for people to transition to electric vehicles. They are cheaper to run, but the initial costs are too high for many people on middle and modest incomes, and the electric vehicle infrastructure is currently not adequate. It is clear that there are issues there that we need to address.
As Stuart McMillan has said, in the here and now, petrol station operators could and should commit to bringing local petrol prices in line with those in neighbouring local areas. People in Inverclyde should not be faced with localised rip-off fuel costs.
Like Stuart McMillan, I welcome the Competition and Markets Authority’s investigation. I also think that we need greater transparency on how operators decide their pricing and that we need to ensure that people across Scotland can get access to online fuel price checkers and are encouraged to do so so that they can get the best possible deals and are aware of exploitative pricing policies. We cannot take it for granted that people are aware of those.
People face higher fuel prices on top of rising home energy costs, rising costs of the weekly shop and now, for many, rising mortgage costs. We need both Governments to deliver real help to support people with the cost of living crisis.
The Labour Party will continue to put forward credible solutions for how to do that. That is why we continue to call for a proper and meaningful windfall tax on oil and gas companies. That would force energy companies such as Shell, which recently posted an eye-watering profit of £8.2 billion in the past quarter, to pay their fair share. The inaction on that means that billions of pounds of taxpayers’ money are going back into the pockets of oil and gas giants. That must change if people in Inverclyde and across Scotland are to get help with fuel costs and the cost of living, and a fairer deal from oil and gas companies.
17:42
To be transparent, I should probably say that, in a former life, I was the manager of a petrol station. Once I had the bairn, I went to work for Tesco in a petrol station. I still have some shares with Tesco.
I congratulate my colleague Stuart McMillan on securing this timely debate, and I agree that his constituents in Greenock and Inverclyde must not be disproportionately impacted by forecourt prices. However, I do not quite agree that that is entirely down to the forecourt owners. Some of the blame must lie with the UK Government’s lack of action on combating skyrocketing fuel prices combined with the abysmal action that it has taken to combat the cost crisis. That is scandalous. While the Scottish Government continues to take all the action that it can within its powers and the financial constraints in which it operates, we need more action from the UK Government.
The steps that would help include a cut in the rate of VAT and a reduction in fuel duty. I will join Stuart McMillan if he writes to the chancellor with those urgent requests, if he wants me to.
Some folk do not realise that the current fuel duty is 57.95p per litre. Although a 5p cut is welcome, we are still paying fuel duty of 57.95p per litre and, on top of that, there is 20 per cent VAT. That pushes up the consumer price of fuel by offsetting tax to increase the wholesale profit. The UK Government holds the levers to change that, but it has not done so yet.
As a member of the Net Zero, Energy and Transport Committee, I of course support a move away from fossil fuels to greener alternatives. However, I acknowledge that getting a hybrid or electric car is not an option for aabodie. Folk still rely on their petrol and diesel cars to get to and from work, to see their family, to get their shopping, to carry out their caring responsibilities, and for a whole raft of other reasons. Diesel and petrol vehicles are still essential, and folk need to be supported and not penalised for using them.
How can tangible and urgent support be implemented to bring down fuel costs and, indeed, other soaring costs? We must extend the windfall tax and increase the percentage of tax, but, crucially, we must also address the loophole that undermines the levy by enabling companies to pay the bare minimum by offsetting profits to investments.
On Thursday last week, it was reported that the UK Government is currently considering an extension to the UK windfall tax, from the current rate of 25 per cent to 30 per cent, until 2028. It is understood that that could raise around £40 billion of additional UK Government revenue over a five-year period, with the possibility of the scheme being expanded to cover electricity generation firms. That is not just a good suggestion; it is crucial and a no-brainer.
Fundamentally, as the Tory-made cost of living crisis ravages households across the country, the UK Government must look at ways of supporting people financially and should not construct more barriers and take money out of their pockets. The UK Government holds the levers to address many of the issues that we are debating. It could help the most vulnerable, including my constituents of Aberdeen Donside, and it could bring real change, yet we are seeing little action—only a talking shop—from UK ministers.
In Scotland, the Scottish National Party Government is taking the steps that it can to help the affected families, but it should not have to mitigate the damaging Tory austerity, nor should its efforts in tackling poverty be dragged backwards. With the full powers of independence, the Scottish Government could get on with the job of supporting Scottish folk through tough times, without the need to continually clean up after the Tories and their dangerous attempts to turn their backs on the most vulnerable folk by refusing to deal properly with the cost of living crisis.
Thank you, Ms Dunbar—although I think that you might have strayed a little, at times, from the topic of the debate.
17:46
Following Jackie Dunbar’s revelation about her previous life in a petrol station, I look forward to future stories of who she met on the forecourts.
I am grateful for the opportunity to contribute to this important debate and am grateful to Stuart McMillan for securing cross-party support to bring to the chamber such an important issue. It has been increasing in public awareness and concern for some time, and has been raised by constituents, businesses and community organisations across Inverclyde, as we have heard.
Inverclyde Council has been vocal about and critical of the great disparity in petrol prices between Inverclyde and other areas of Scotland, since the issue first arose. I have had a conversation with my colleague Councillor Martin McCluskey, who represents Gourock and has been working to shine a light on this important issue, which affects not just his constituents in Gourock, at the western end of the area, but all people across Inverclyde. His efforts have included writing, as many of us have done, to the Competition and Markets Authority about that proposed road fuel market study.
However, he and others have suggested that there has to be a more robust analysis of the issue at local level. In correspondence with the CMA, he has urged it to expand its investigation beyond the rural-urban divide of petrol prices, by pointing out that Inverclyde does not fall neatly into the category of being exclusively rural or exclusively urban, and to consider Inverclyde on its own merits as a potential case study, because the area has been at the sharp end of higher fuel prices for years and, as I have said, does not neatly fit within some of the criteria. I echo those calls again and ask the Government to urge the CMA to act in that way.
The current situation is unfair and unsustainable. There is no valid justification as to why people in Inverclyde have to pay significantly more to fuel their cars than people across the rest of Scotland, including their near neighbours in places such as Renfrewshire.
As we have heard and understand, international pressures affect fuel prices, but that does not explain why prices have risen more quickly and have remained higher at forecourts across Inverclyde. I, too, have had the sort of response from the supermarkets that Jamie Greene has mentioned, about local price comparison and competitiveness, and, to be honest, it does not cut the mustard in explaining exactly what is going on.
It makes no sense that someone from Greenock or Port Glasgow has to drive 10 or 15 miles into Renfrewshire so that they can fuel up their cars for significantly less in Bishopton, Erskine or Paisley. Just the other day, I had a conversation with my office manager, who lives in Port Glasgow and works in Paisley. She tries to ensure that she fills up the car only when she comes to work, having left the Inverclyde boundary.
In the summer, the average price of petrol was £1.85 per litre in Inverclyde, compared with £1.77 per litre in Renfrewshire and £1.74 per litre in East Renfrewshire. That is almost the equivalent of a £5 tax every time someone fills their car with petrol in Inverclyde. Although it is encouraging that recent data has shown that a litre of petrol now costs, on average, £1.65, which is 24p less than the peak price in August, it is clear that prices in Inverclyde are still far too high, and higher than anywhere else in Scotland, with fuel costing 6p more per litre.
We must ask ourselves how it can be justified that people who fuel up in Inverclyde are faced with the biggest bills in the country while—as we have heard—companies such as BP report eye-watering, and frankly immoral, profits, with BP reporting a profit of £7 billion for the quarter between April and June. I also agree with what Stuart McMillan has said about the profits of supermarkets and their duty to act in this space.
Faced with growing energy bills, rising food prices and stagnant wages, people in Inverclyde should not also be faced with an extra fuel tax for filling up their car at the forecourt that is closest to their home. In the midst of the cost of living crisis, multinational companies should be doing whatever they can to support people, not ripping them off based on where they live. The postcode lottery for fuel costs is simply ridiculous.
It is important to state that the debate, and the entire argument, is not about party politics—it must be about the people of Inverclyde. It is incumbent on us all, therefore, as Inverclyde’s elected representatives, to work together to get to the bottom of why these fuel prices are so high, bring about action that will lead to a reduction in fuel prices and deliver a fair deal for Inverclyde.
17:51
I commend Stuart McMillan for bringing the debate, which I welcome, to Parliament. Fuel costs are a critical issue and it is right that we spend time in Parliament debating the impacts that they are having on thousands of individuals, families, businesses and communities in Inverclyde and, as we have heard, in many other parts of Scotland.
I also commend Stuart McMillan for his #fairfuel watch campaign, which has sought to reduce inequalities in the market and increase the transparency of the fuel prices that his constituents face. In that context, I join colleagues in welcoming the Competition and Markets Authority’s decision to undertake a market study on the road fuel market in the United Kingdom. The Scottish Government has formally indicated its support for that review and I assure colleagues that we have asked to be kept informed on matters relating to Scottish interests in particular. I also confirm that the Scottish Government and Transport Scotland officials have been in touch with the CMA to offer their services where required.
The Competition and Markets Authority’s initial findings, which were published in July, were that the main causes of the rising price of fuel include increased crude oil prices, the worsening pound-to-dollar exchange rate and an increase in the margin between wholesale and retailers.
I have read the document that contains the CMA’s initial findings and I would highlight one point to the CMA. If those aspects were accurate, the petrol prices across all fuel courts would be similar to the prices in Inverclyde, rather than Inverclyde being an outlier where fuel is far more expensive than it is in other parts of Scotland and people are being ripped off.
The member makes a powerful point with regard to the variation in the retail spread. I very much hope that that will be recognised as part of the CMA’s consideration of the matter.
We know that we have to end our society’s reliance on fossil fuels in order to secure our future, and the Scottish Government is already supporting the just transition that is needed from the production of oil and gas to renewable resources. However, until we get there, we need to consider that there is currently a dichotomy between the value of production in Scotland’s economy and the price that we pay at the fuel pumps for heating fuels and for goods and services that are dependent on being shipped and transported across Scotland.
The current situation is entirely unfair for people both in Inverclyde and across Scotland. It has, unfortunately, been exacerbated by political decisions, and particularly those that have had a material impact on the depreciation of the pound against the dollar—namely, Brexit and the recent volatility that has followed in the wake of the mini-budget.
Notwithstanding that backdrop, however, the initial findings of the Competition and Markets Authority are welcome, and we will particularly welcome it if its work leads eventually to a fairer outcome for Scottish interests. It has found that the retail market seems to be competitive, although it acknowledges that the gap between retail and wholesale prices has been volatile. The authority states that it will investigate the retail market further, including the issue of whether disparities between local areas are justified.
As a key issue for the investigation, the Scottish Government has raised with the Competition and Markets Authority the fact that pricing is inconsistent between urban and rural areas and in particular areas of Scotland such as Inverclyde. The authority has acknowledged that the reasons for local variations in fuel prices are among the issues that it is considering. The market study will also investigate the relationship between the wholesale and retail prices of fuel, and it will look at the role of supermarkets in the retail fuel market.
We understand that the Competition and Markets Authority will publish a report shortly to update its initial findings, but the final conclusion of the study and recommendations for the UK Government will not be published until next year. Although I acknowledge that the authority needs to be allowed to do its work, people simply cannot wait for that length of time over a winter with huge cost pressures on household finances. We expect the UK Government to take appropriate actions to implement the recommendations of the market study once it is published. However, that should not preclude the UK Government from taking action now to protect households and businesses from the impact of high fuel prices.
As Jackie Dunbar highlighted, the UK Government holds the powers that can directly influence road fuel costs, including those over VAT, the taxation of windfall profits and the regulation of the energy market. As at 3 November, 49 per cent of the cost of petrol per litre at the pumps was made up of fuel duty and VAT. It should be noted that the main policy lever to disincentivise car use—fuel duty—is also reserved to the UK Government. Despite approaches from the Scottish ministers, no meaningful dialogue on that issue has been forthcoming.
As part of its net zero review, the UK Government has acknowledged that, as we transition away from fossil fuels and the taxes that are based on them, structural changes to our tax system will be required. Despite our seeking engagement at ministerial and official level on that issue, the UK Government has yet to give the devolved nations clarity on whether—and, if so, when—it plans to replace motoring taxes.
The Scottish Government welcomed the temporary 5p reduction in fuel duty when it was announced earlier this year, but it feels like a missed opportunity to target support at increasing incomes rather than cutting costs.
We have been clear in our communication with the UK Government that any new support should be funded by an enhanced windfall tax to target the excess profits that are being made in the energy sector, rather than by passing all the cost to households through even higher borrowing.
Our programme for government sets out the Scottish Government’s immediate response to the cost of living crisis as well as outlining our ambition to create a better future in the longer term. Within a limited budget and the restrictions of devolution, we have provided significant support for families and the most vulnerable, which will also indirectly support communities and local businesses. By April 2023, we will have invested around £3 billion in a range of measures for households to support energy bills, childcare, health, social security and travel.
For businesses, our package of rates relief is worth more than £800 million, and we have established a joint task force with business, the Convention of Scottish Local Authorities, agencies and local authorities to consider the differing impacts of regulation on businesses and extending energy advice to businesses. We continue to do all that we can to ensure that people, communities and businesses are given as much support as possible to deal with the rising cost of living.
I acknowledge that, as members have touched on, it might seem incongruous that we are debating the subject during COP27 and arguing for fairer treatment of people in Inverclyde and elsewhere in Scotland in relation to fuel prices for vehicle use. However, this debate highlights why we need things to be different in the future. The recent rises in the cost of motoring underline the unfairness of the current, regressive motoring tax regime.
The Scottish Government wants a fair and progressive future transport tax system that reduces unnecessary journeys, raises revenues to fund policies to support a shift to more sustainable travel, and better incentivises the transition to zero-emission vehicles for those who need them.
Until such times as the relevant powers are exercised by this Parliament, we will continue to urge the UK Government to use the levers at its disposal to address the gaps in support for the people and businesses of Scotland. In the meantime, we are doing everything that we can with the powers that we have to grow and transform Scotland’s economy in order to deliver a fairer, greener country for people in Inverclyde and across Scotland.
On reviewing the text of the motion, I note that I might have done a disservice to Jackie Dunbar earlier, for which I apologise.
Meeting closed at 18:00.Previous
Decision Time