HC Deb 24 February 1975 vol 887 cc3-5
2. Mr. R. C. Mitchell

asked the Secretary of State for Energy what representations he has received concerning proposals for a two-tier system of petroleum pricing; and what replies he has sent.

The Under-Secretary of State for Energy (Mr. John Smith)

My right hon. Friend has received representations from a number of quarters, including hon. Members, motoring and other organisations. He has explained that two-tier pricing is only one of a number of energy saving ideas currently being looked at.

Mr. Mitchell

Do I take it from that reply that no decision has yet been taken about a two-tier pricing system? Is anybody examining the administrative costs of operating such a system?

Mr. Smith

There has been a great deal of speculation in the Press and elsewhere about this matter, but no decisions has been taken by the Government. The costs of fuel rationing would be very considerable, but the cost of a two-tier system would be less. We calculate that it would be about £5 million. However, I emphasise that no decision has been taken.

Mr. Cormack

Will the Minister accept that many of us feel that the two-tier system is the most fatuous suggestion that has ever been made, and that it would be far more sensible if help could be given to those in rural areas by allowing them to offset a certain portion of the expenditure against tax, but that subsidies should not be accepted?

Mr. Smith

In the initial stages most of the representations about a two-tier pricing system came from Conservative Members who represent rural constituencies. Obviously, they changed their tune when they realised what the likely allocation would be.

Mr. Cormack

Not 1.

Mr. Smith

Perhaps not the hon. Gentleman, but some of his hon. Friends took that view. There is a real problem in rural communities, which the Govern- ment accept, but it is difficult to pick out people in the rural areas as distinct from those in other parts of the community. It is difficult to see what can be done to assist them. The question of taxation is a matter for my right hon. Friend the Chancellor of the Exchequer.

Mr. Cledwyn Hughes

Is my hon. Friend aware that the problem in rural areas exists because of the inadequacy of public transport there, that many of my constituents have to use their cars to travel to work, and that great embarrassment and difficulty is caused to them because of the high and increasing cost of petrol? Will he take that factor into account when the scheme is being worked out?

Mr. Smith

We have the problems of rural areas very much in mind. My right hon. Friend will appreciate that if a certain type of two-tier pricing system were introduced people in rural areas might be worse off rather than better off, in terms of the allocation of petrol. We are aware of the difficulties which face people because of insufficient public transport. That is why my hon. Friend the Under-Secretary of State for the Environment is currently carrying out a review of public transport services.

19. Mr. Lane

asked the Secretary of State for Energy whether he will make a further statement on petrol pricing policy, in the light of the latest indications of crude oil prices for the rest of 1975.

Mr. John Smith

There are no indications of a major change in crude oil prices this year and I do not think, therefore, that a further statement is called for.

Mr. Lane

Is it not a fact that users of petrol, including many who have to travel to work in my constituency from outlying country districts, are bearing a disproportionate share of the total level of oil taxation? Will the hon. Gentleman urge the Chancellor of the Exchequer, when he is considering the relative oil product tax levels before the next Budget, to introduce some alleviation within the total for petrol?

Mr. Smith

Many people suffer from the increases which have had to be imposed in the price of petrol. The hon. Gentleman referred to people in rural areas. We understand their problems, but it would be a mistake to think that the difficulty is confined to them. Many shift workers in urban areas have to pay substantial extra costs to get to work. It would be difficult to work out a scheme to help people without creating even greater problems. No doubt the Chancellor of the Exchequer will have noted the suggestions made by the hon. Gentleman.