HC Deb 26 January 1989 vol 145 cc1163-4
3. Mr. Kirkwood

To ask the Chancellor of the Exchequer what representations he has received concerning tax concessions on lead-free petrol.

The Economic Secretary to the Treasury (Mr. Peter Lilley)

A number.

Mr. Kirkwood

I thank the Minister for his helpful answer. Does he accept that for lead-free petrol to become the norm it will have to become available in all retail outlets throughout the country, including small retail outlets such as those in the Borders? The only way realistically to do that is to increase demand. The only way to increase demand for lead-free petrol is to increase its tax advantages against petrol containing lead. Will the Minister give careful consideration to the representations that he has had so that a positive change may be made in the forthcoming Budget?

Mr. Lilley

I am sure that my right hon. Friend has noted the hon. Gentleman's remarks. Although I cannot be very helpful about his request for information about tax concessions in future, I can remind him of what occurred in the last Budget when my right hon. Friend the Chancellor increased the differential between lead-free and leaded petrol. Since then, there has been a considerable increase—indeed, a tripling—of the number of outlets at which it is available.

Mr. Mans

Does my hon. Friend agree that following the tax concession in April, sales of unleaded petrol have increased by 1,500 per cent? Does that not demonstrate that the tax concession is quite sufficient at the moment, and that any moneys that may be available from the Treasury to promote the use of unleaded petrol would be better used in persuading manufacturers and petrol companies to increase its availability?

Mr. Lilley

My hon. Friend is quite correct to point to that statistically large increase although, admittedly, it was from a small base. By October, the market in lead-free petrol had reached about 1.6 per cent. By mid-January it had reached 3.5 per cent. so it is clearly growing rapidly. I agree with my hon. Friend about the need for campaigns to spread information by both petrol retailers and motor car manufacturers.

Mr. Haselhurst

Will my hon. Friend note that there are many obstructions in the way of the admirable policy of our right hon. Friend the Chancellor to introduce a differential in the duty on lead-free petrol, one of which is the price spread of four-star leaded petrol, which can be anything between 12p and 14p in a district? Is it not worth reminding the Chancellor that if something is worth doing it is worth doing well?

Mr. Lilley

My hon. Friend is correct to say that there is a spread of prices for four star, although the recent Which? report showed that, almost universally, garages were passing on the advantage of the tax increase at the last Budget. The differential between lead;free and four-star petrol was about 5½p at the pump.

Dr. Marek

Is the Minister aware that he has the Opposition's support to increase the use of unleaded petrol? He will also have the Opposition's strong support if he introduces a bigger differential between leaded and unleaded petrol in the next Budget. Will he try to persuade his right hon. and hon. Friends to provide more advertising on site, to ensure that advice is widely available and to tackle ignorance so that motorists are aware of the problem and take the advice that is widely available?

Mr. Lilley

I am grateful for the hon. Gentleman's remarks and I agree about the importance of advice. It is important that people recognise that virtually all new cars can take unleaded petrol; from October 1990 all new cars will be able to do so. Most cars can be converted at small cost to run on lead-free petrol; only a dwindling minority are incapable of such conversion.

Mr. Roger King

Notwithstanding what my hon. Friend has just said, will he bear in mind that millions of car owners depend on leaded fuel? If the differential between unleaded and leaded fuel is to be increased, will he ensure that it is not at the expense of increasing duty on leaded petrol?

Mr. Lilley

I am sure that my right hon. Friend noted those remarks, as did I.

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