HC Deb 21 March 2000 vol 346 cc840-1
2. Mrs. Ray Michie (Argyll and Bute)

What recent representations he has made to the Chancellor of the Exchequer about the economic impact of petrol prices in the highlands and islands. [114009]

The Minister of State, Scotland Office (Mr. Brian Wilson)

My right hon. Friend the Secretary of State and I have regular contact with my right hon. Friend the Chancellor of the Exchequer and discuss various matters.

Mrs. Michie

Has the Minister made the Chancellor aware of the damage done to the highlands and islands by the high cost of fuel and the constant hike in petrol duty without the proper compensatory measures which the Liberal Democrats have long advocated? Can he explain the contradiction between the Government's policy to develop the area and to encourage tourism and social inclusion and the persistently high fuel costs which undermine and work against those laudable aims? It looks as though the right hand does not know what the left hand is doing. What happened to joined-up government?

Mr. Wilson

I recall very well from my time as a Back Bencher that there is a real problem in tabling questions two weeks before they are answered. I fully understand that when the hon. Lady tabled her question, she did not know that last Thursday the Liberal Democrats would announce that they did not think that fuel tax was too high, but that it was too low. Therefore, in their alternative Budget, they have proposed increasing tax on petrol by 5p a litre. I think that the hon. Lady has some sorting out to do between her left hand and her right hand.

Mr. Calum Macdonald (Western Isles)

Does my hon. Friend agree that the real problem with fuel prices is the policy of the major oil companies in imposing higher prices in the highlands than in the rest of Scotland? When does he expect the Office of Fair Trading to report on that policy, and will he undertake to implement in full the findings of that report when it is delivered?

Mr. Wilson

As my hon. Friend suggests, the structure of fuel prices in the highlands—and indeed everywhere else—is extremely complex and various elements within it produce the final total. He is quite right to say that the OFT is investigating the matter. I look forward to receiving the report in the very near future. In the meantime, I have been having discussions with the oil companies about tackling the problem of differentials in order to give an advantage in terms of the wholesale price to rural outlets which sell small volumes of petrol. If the oil companies gave them such an advantage, the problem of differentials would be largely eroded.

Mr. James Gray (North Wiltshire)

As the Minister says, the price of petrol in the highlands is indeed a complicated matter. Will he therefore answer two simple factual questions? First, in pounds and pence per gallon, what is the price of petrol in the highlands; and secondly, how does it compare with the prices in England and the continent of Europe?

Mr. Wilson

There is no simple comparison because there is no uniform price in England, Scotland or the highlands and islands. I am trying to erode the differential so that no part of the country is discriminated against significantly in terms of petrol prices any more than they are discriminated against in terms of postage charges, for instance, which are within the public sector.