Beer Duty Escalator

Albert Owen Excerpts

Thursday 1st November 2012 Commons Chamber

[Albert Owen (Ynys Môn) (Lab)]

It is a pleasure to speak in the debate and I pay tribute to the hon. Members for Burton (Andrew Griffiths) and for Leeds North West (Greg Mulholland) for securing the debate. I am happy to be a co-sponsor of the motion, which is very important.

I have only five minutes, so I cannot list the fine establishments in my constituency. I would be a fool to miss some of them out, so I will not attempt to list them. I do not have any major breweries, either, but I want to give the debate a different dimension and add something new. People have quite rightly promoted their public houses and breweries, but there is an important link between the breweries and the pubs—that is, between the suppliers and the distribution industry. In rural and periphery areas, they are vital in getting the product to the licensed outlets, whether they are clubs, pubs or hotels. In periphery areas such as mine, and in many other parts of the country, visitors make a very important contribution to the local economy. They use the public houses for their leisure activities and we need to put the multiplier effect into its proper context. Hundreds of millions of pounds are generated by the tourism industry and the public house is key to that. It is not just a local pub, but a centre of attraction for visitors.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

The hon. Gentleman is making a very important point, particularly about the knock-on impact of pub closures in rural areas. The Great Newsome brewery, a small brewery in my constituency, has seen six of the pubs it supplies close in just the last two years. Evidence has shown that each pub puts £80,000 into the local community and makes the East Riding of Yorkshire a more attractive place for tourists. The hon. Gentleman is absolutely right and I hope that we will see a change of direction from the Government.

[Albert Owen]

I am grateful to the hon. Gentleman. I am very fond of going to Yorkshire. I went to university there and regularly visit York and the fine pubs in that area, so I might come to Humberside and the east coast at some point.

The suppliers are important small and medium-sized enterprises. A family business in my constituency, Joseph Keegan and Sons, wrote to me. It has been established for many years and supplies the area and its concerns are about beer duty and fuel duty, too. Many companies have been hit by the high levels of fuel duty when transporting their goods, so there is a double whammy of which the Minister must take note in his review.

The motion before the House is very moderate, because all it calls for is a review. The hon. Member for Leeds North West, in his measured contribution to the debate, was right to say that Members across the House have supported escalators when there was a need to do so. The beauty of an escalator is that we can get on or off it when the conditions are right, so the Government would not lose face by coming off it. A previous Conservative Government brought in the fuel duty escalator and then came off it when they thought that was necessary, so that can happen quite simply.

[Andrew Griffiths]

I agree completely with the hon. Gentleman’s point about the rising cost of fuel for brewers. He will also be aware of the rising cost of the raw materials that brewers must purchase and the falling incomes of households across the country.

[Albert Owen]

The hon. Gentleman is absolutely right. We are talking about the business of pubs, clubs, hotels and suppliers, but we must also consider the producers. Much of the problem is beyond the control of Governments and the terrible weather this summer has affected the price of raw materials, and that all has an impact on costs.

I want to talk, as many Members have done, about the social value of the pub as a hub in our towns and villages. My hon. Friend the Member for Hartlepool (Mr Wright), who is no longer in his place, said that Hartlepool once had the highest concentration of pubs in the country, a claim that many of us could make for our constituencies. In the port communities of Holyhead and Amlwch in my constituency there is certainly a tradition of pubs, but they are more than just public houses serving food and drink; they are social hubs. Many local sports clubs meet in the public houses, particularly in the winter when they cannot train. I have known one or two rugby and football clubs that spend an awful lot of time in pubs; they get their business over with very quickly and then get on to the drinking and the sandwiches. The pub is an important place for people to meet in those communities.

I pay tribute to the hon. Members who tabled this important motion. Yes, it is specifically about beer duty, but I am sure that the Minister and the Treasury will take on board all the points that have been made today. It is nonsense to impose a duty that does not make any money for the Treasury. That is the nub of the debate. But many other issues have been raised by Members in their contributions. It is worth emphasising the importance of the pub, but we must not forget the supply chains that help the pub, hotel and catering industries across the United Kingdom, which are major contributors to the British economy.

I will draw my remarks to a close as I know that other Members wish to speak. I do not want to walk past pubs in my constituency with “For Sale” signs outside, and I do not want to see empty pubs; I want to be invited by members of the local community to open a pub, because I want to see a renaissance of the great British pub in both rural and urban communities across the country. The Government can make a difference by having the review and looking at its results and, if it shows that the duty is cost-neutral or loses the Treasury money, they will have my backing for coming off the escalator and putting the emphasis on the great British pub.

Oral Answers to Questions

Albert Owen Excerpts

Tuesday 24th April 2012 Commons Chamber

[Albert Owen (Ynys Môn) (Lab)]

Energy prices and uncertainty surrounding the support for low-carbon energy, alongside uncertainty about electricity market reform, are causing some companies to reassess their business plans in this country. Can the Minister assure us that the Chancellor and the Treasury will support market reform in the next Session of this Parliament and ensure that the subsidies are in place to get the jobs and prosperity that the country needs?

[Miss Smith]

The Treasury supports electricity market reform, as I think the hon. Gentleman knows. He will also know that we have also laid out our support for energy-intensive industries. I have no doubt that he will be able to direct questions about programming to the Leader of the House.

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[The Chief Secretary to the Treasury (Danny Alexander)]

Information is not available at constituency level, but I can confirm that for the east midlands government region 1.7 million people will benefit in 2013-14 from the largest ever increase in the personal allowance, which was announced in the Budget. Some 152,000 people will have been taken out of tax altogether in the east midlands by the policies of this Government.

[Albert Owen (Ynys Môn) (Lab)]

T6. It has been reported in the papers that the Chancellor is prepared to meet with charities so that he can explain his tax hike and tell them how he can get it right in the future. For the sake of consistency, will he also meet with the purveyors of pasties, church leaders and caravan operators and manufacturers so that he can tell them how he will get it right in the future and they can tell him to drop these VAT hikes?

[Mr George Osborne]

What I find extraordinary is that we have a Labour MP supporting the idea that the very wealthiest people in this country pay no income tax. That is an extraordinary thing for a Labour MP to advocate. As I say, we have made reforms in the Budget to improve the tax system and to ensure that people at the very top of the income scale pay some income tax.

Finance (No. 4) Bill

Albert Owen Excerpts

Wednesday 18th April 2012 Commons Chamber

[Peter Aldous]

I shall come to that issue in a moment.

My second point is that HMRC’s analysis fails to take account of the vital role played by static caravan owners in a local economy such as that in Waveney. They are, in many respects, the “anchor tenant” for the whole tourism industry. They come to stay in the area for most weekends, and they do not limit their visits to the summer season. They spend money in local shops, restaurants and pubs, visit the many day attractions in my area such as Pleasurewood Hills and Africa Alive, or spend a day on the beach or boating on the Broads. A reduction in their numbers would have a significant knock-on effect on the many businesses in the area.

Finally, I believe that the rationale for the introduction of the tax is flawed. It is claimed that it addresses an anomaly, as touring caravans are subject to VAT while static caravans are not. However, the industry has come a long way since 1973, when the VAT exemption was first made, and I believe that today’s static caravan has more in common with a holiday home than with a mobile caravan. Static caravans are more like second homes in terms of their facilities and the nature of the accommodation, the investment that their owners have made in them, and the way in which they are used—not just for once-a-year holidays, but for regular visits throughout the year.

[Albert Owen (Ynys Môn) (Lab)]

Another consequence of the tax is that those who currently buy caravans to use as second homes would actually buy second homes. That would raise the price of affordable homes, especially in rural areas such as the hon. Gentleman’s constituency.

[Peter Aldous]

I am not sure that I entirely agree with the hon. Gentleman. The problem with many second homes is that they are very expensive. What worries me that, certainly in my area, people would go abroad for holidays. They might even buy a villa in Spain, which really would be cheap, and the whole tourism industry would be affected.

In many respects, the current tax treatment of second homes and statics is, by chance, similar. The former pay stamp duty, while the later pay VAT on movable items only. To change that balance would unfairly penalise this group of people. Many of them cannot afford a second home, yet they are similar to second-home owners in so many ways. Such a move would be regressive in taxation terms.

In summary, I believe that the impact of this proposal will be far greater than HMRC’s assessment implies. It will have a significant negative effect on the economy and on jobs in specific locations around the country, including my constituency. Further, I question whether the anomaly it is intended to address actually exists. I therefore urge the Government to think again, and to allow a vital industry to continue to play a key role in securing the economic recovery.

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[Mr Davis]

The hon. Lady makes a powerful point that I am not unfamiliar with. We have all been in similar battles over job losses at BAE in Brough and, in my constituency, job losses to the tune of 1,700 have been announced in the past six months.

This proposal does not stand up, on the Government’s own criteria. Accordingly, I support new clause 6 and will vote for it when it is put to the test.

[Albert Owen]

It is a pleasure to follow the right hon. Member for Haltemprice and Howden (Mr Davis). Although I agree with the contributions of Members on both sides of the House on the pasty tax and the church buildings tax, I will concentrate on the caravan issue.

As has been said eloquently by the previous speaker and my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson), the exemption was put in place for good reason. It has been left as it is because previous Chancellors have understood its importance, not only to manufacturing but to tourism. Those two important industries will be damaged if this proposal goes forward. I do not have the confidence of some Members who have spoken that the Chancellor will extend the consultation and that all things will be rosy. The effect of the proposal will be catastrophic for tourism across the United Kingdom.

[Alex Cunningham (Stockton North) (Lab)]

Chris and Helen Brown set up the Drovers Way holiday caravan park in my constituency just two years ago to diversify their farming business. They have an exciting business model, but they tell me that the VAT proposal will kill their business and put them out of work. What message does the Chancellor have for people like them?

[Albert Owen]

My hon. Friend is absolutely right. The people who have contacted me on this issue are not natural Labour supporters, but business entrepreneurs. The Government have said on numerous occasions that they want to encourage aspiration and to help entrepreneurs and those who want to take risks in business. Those are the very people who will be damaged by this proposal.

[Chris Ruane (Vale of Clwyd) (Lab)]

Does my hon. Friend agree that the problem relates not only to static caravans, but to mobile caravans? A company called Fifth Wheel in my constituency has just invested £1 million in the manufacture of mobile caravans. It has won 10 awards from the Caravan Club of Great Britain in the past 10 years and two awards from the Daily Post. Its legs have been knocked from underneath it by a tax that has been foisted on it without any consultation.

[Albert Owen]

I am grateful to my hon. Friend for making that point. I am referring specifically to static caravans, but he is right to say that this important industry includes mobile caravans.

A business that employs many hundreds of people across the United Kingdom, including in my constituency, wrote to me to say that 60% of its turnover comes from the sale of caravans. The proposal will be a huge knock to such companies.

Because of the time, I shall keep my remarks brief, but I want to raise one issue that has also been referred to by the hon. Member for St Ives (Andrew George). It will predominantly be the young people who work in this industry who will lose their jobs as a consequence of the proposal. Young people face many pressures in rural areas, especially in finding work and finding a home. Many people get a mobile home in such areas because they aspire to have a second home. They then rent it out to other people when they are not using it, which contributes to the local economy. However, in deprived areas where property prices are low, those people may transfer—because they want to come to beautiful places such as the Isle of Anglesey—

[David Morris]

Will the hon. Gentleman give way?

[Albert Owen]

I will not give way again; I have already given way twice and I want to finish my point.

People who visit places such as the Isle of Anglesey, which I represent, want to go to them regularly. They will therefore buy terraced houses or properties at the lower end of the market and force up the prices of those properties. That will put pressure on affordable housing. I do not think that that is an issue that the Treasury has taken on board.

This exemption is not an anomaly, but is meant to help the industry. If that industry suffers, many people in the tourism and manufacturing industries across the United Kingdom will suffer. We have seen headlines about the granny tax, the pasty tax and the charity tax, but this proposal is an Osborne tax. It was made in No. 11 and will have consequences across the United Kingdom. Tonight, Members on both sides of the House have the opportunity to vote it down. That is the strongest and clearest message that we can send the Chancellor of the Exchequer and his lieutenant. That is true not only of the caravan tax but of the pasty tax, which I will also vote against if there is an opportunity to do so tonight. Let us be consistent. The caravan tax will not raise extra revenue for the Treasury, but it will damage jobs, entrepreneurs, coastal areas of beauty that rely on tourism and areas that rely on the manufacturing of caravans.

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

I should like to draw to the Government’s attention a couple of anomalies in the VAT rules that they have created with their Budget proposals. That is quite ironic considering that the reason that Ministers have given for their proposals to change the current VAT rates for pies, pasties and caravans is to iron out such anomalies.

I start with hot food. The Government propose to amend note 3 in the existing legislation so that

“the current test for ‘hot takeaway food’ which is based on the purposes for which food is heated becomes a simpler and more objective test based on whether the food is above ambient air temperature at the time it is provided to the customer.”

That suggestion is nonsense, and I will explain why.

Fuel Prices

Albert Owen Excerpts

Tuesday 15th November 2011 Commons Chamber

[Robert Halfon]

A lot of people want to speak, so I do not want to take too many interventions.

The coalition Government abolished the fuel escalator—we welcome that—and cut duty by 1p. They also introduced a semi-stabiliser, which means that duty will rise quicker than inflation only if oil prices are low for a sustained period. Thanks to this, motorists will pay £274 less on fuel duty during this Parliament than if the previous Government had been re-elected and stuck with their plans—but for most people filling up the family car, our prices are still the most expensive in Europe. Even bankrupt socialist nations such as Spain now have lower rates of fuel tax than Britain.

[Albert Owen (Ynys Môn) (Lab)]

I congratulate the hon. Gentleman on securing this debate. Does he acknowledge that in January there was a hike in VAT that affected individual motorists right across the country?

[Robert Halfon]

I am glad that the hon. Gentleman raises that. The majority of businesses that are suffering from fuel prices get their VAT refunded. Sadly, as I mentioned, the last Labour Government increased the fuel escalator by 6% ahead of inflation. When we cut fuel taxes in the last Budget, Labour Members voted against it.

Research has shown that residents in my constituency of Harlow are now paying £42 million in fuel taxes every single year. However, tax is not the only problem. There are suggestions that some of the big oil companies are behaving like a cartel, with a stranglehold over the market. Brian Madderson of the Retail Motor Industry Federation says that the small forecourts that he represents are now forced to buy fuel from the big players at a set wholesale price on a daily basis rather than on weekly or monthly terms. There is no competition from wholesalers on these terms. The Enterprise Act 2002 gives Ministers powers to ask for an independent market study, and that is what we need.

Another factor is that fuel prices are quick to rise but sluggish in coming down.

--- Later in debate ---

[Albert Owen (Ynys Môn) (Lab)]

It is a pleasure to follow the hon. Member for Wyre Forest (Mark Garnier). I congratulate the hon. Member for Harlow (Robert Halfon) on securing the debate, and I was one of those who signed the motion and helped him to do so. I believe that the motion is a little broad and weak in its application, but I understand the reason for that—securing this debate.

I wish to talk about two main issues to do with how fuel prices hit peripheral areas—not just isolated communities but other areas on the periphery. They suffer from a double whammy of high energy costs—particularly for those who are off the grid and have to pay for heating oil and liquefied petroleum gas—and having to pay more for their petrol.

Road journeys are a necessity in communities such as the one that I represent. We are not talking about Chelsea tractors or luxury vehicles; we are talking about the necessity of getting from A to B in rural and semi-rural areas, where alternatives do not exist. If the hon. Member for Harlow were to come to my constituency, along with the hon. Member for Crewe and Nantwich (Mr Timpson) and others, he would see the price differences as he moved west from Chester to Anglesey. Only yesterday, the difference was 7p per litre of petrol, and far more for diesel. We need to do something about that.

I welcome any reduction in fuel duty, for which I have campaigned for many years, but the March reduction was wiped out by the January VAT increase. That was a real problem for real motorists. I understand what the hon. Member for Harlow said about businesses reclaiming VAT, but ordinary motorists were unable to reclaim that extra 2.5 percentage points.

[Andrew Miller (Ellesmere Port and Neston) (Lab)]

My hon. Friend knows that fuel prices go up when he travels westwards from the Chester area to his constituency. However, there are also people in urban areas who are trapped by fuel prices, such as the lady who came to see me at my last surgery, who has to travel to Liverpool for medical treatment and also has to travel regularly to Bolton to see her daughter, who is in a mental health hospital. Such people need support, and some of them live in urban areas. I am sure he would not want to exclude them.

[Albert Owen]

Sure—and I was not making a rural versus urban argument, I was talking about peripheral areas, particularly those far from refineries. Indeed, I want to talk about British refineries. Quite often, crude oil from the North sea is actually refined in faraway countries and brought back here, which adds cost. We therefore need to improve our refinery capacity in this country, to keep prices down.

I welcome the fact that the escalator has been done away with. It was introduced in 1993, perhaps for good reasons: it was felt that people could move from private to public transport. However, in semi-rural areas that is just not possible. That is why motorists have been enraged by the rise in the escalator. It went up, I think, by 5% under the Conservatives and 6% under Labour.

The Government could deal with VAT now. We can talk about the effect that a semi-stabiliser would have on North sea oil and the prices at the pump, but the Government can take measures now to reduce VAT to help motorists today. When the previous Government lowered VAT from 17.5% to 15%, fuel prices came down, helping to stimulate the economy. [Interruption.] They did. The hon. Member for Na h-Eileanan an Iar (Mr MacNeil) is laughing, but he needs to compare the prices. Prices came down and businesses were able to trade more. Individuals could also use their cars more, and not just for work but for leisure. [Interruption.] The hon. Gentleman says from a sedentary position that fuel duty went up, but the calculation shows an overall saving to the motorist at the pump, and that is what we are talking about. We can argue the complicated and technical aspects, but at the end of the day people want lower prices at the pump.

[Toby Perkins (Chesterfield) (Lab)]

Government Members may well be laughing too, but people in Chesterfield are not laughing, because they are paying through the nose. It is not just the general public who are affected by the current level of VAT. Small businesses up and down the country that are not VAT-registered and do not qualify to get their VAT back are paying huge amounts. We should not be laughing about this; we should be taking the point seriously.

[Albert Owen]

I am grateful to my hon. Friend. The Government need to look again at changing the rate, because it worked. If we in this House are serious about stimulating the economy, we need to look at such mechanisms—which can be used now—because the economy is flatlining.

Areas such as mine are paying extra for energy and fuel, and we need to do something about it. We had a debate the other week about energy prices, and we agreed that we needed to investigate what is called the “rocket and feathers” effect—that means that when prices go up they shoot up quickly, but when they come down they come down slowly—for domestic energy users and retailers. As the hon. Member for Harlow said, we also need to look at that effect in relation to crude oil prices, which also escalate quickly but come down slowly. We need some sort of commission to examine that mechanism.

The three points that I wanted to make today are as follows. We need to look at the differentials between areas close to refineries and those on the periphery. I understand that a rebate is being considered for remote islands, but, as has already been said, that does not help the many motorists around the coastal areas of the United Kingdom who are paying considerably more. I heard one of my colleagues from Northern Ireland say that Northern Ireland has higher prices, but according to the website that compares prices, Bangor in north Wales pays 3p or 4p a litre more than Bangor in Northern Ireland. I say good luck to the people who live in Bangor in Northern Ireland, but my constituents are paying 7p a litre more, week in week out, to trade, to do business, to move people and goods across the area and to take young children to amenities and leisure facilities of a night.

It is time the Government did something. I will back them when they do the right thing. They can consider whether more could be done on refineries. We need to look at transport costs and VAT, and we need to help the people today.

Arch Cru Compensation Scheme

Albert Owen Excerpts

Wednesday 19th October 2011 Westminster Hall

[Tristram Hunt]

The hon. Gentleman is absolutely right. What we have seen with the Financial Services Authority is a lack of confidence in its capacity to deal with this inquiry and the regulation of it. That is why I join my hon. Friend the Member for Rutherglen and Hamilton West in urging the Minister to take advantage of section 14 of the Financial Services and Markets Act 2000 to launch an inquiry, because the FSA has been silent on this matter for too long and as a result investors have little confidence in it. The FSA is part of the regulatory framework that initially failed our constituents.

I will wrap up now as I know that other hon. Members want to speak. I agree with my hon. Friend the Member for Rutherglen and Hamilton West that we are only at the beginning of this process. As I have said, we need the sort of inquiry allowed under section 14 of the 2000 Act. We also need a proper compensation deal and package, and I am struck by the 1996 Investment Management Regulatory Organisation model as a way of moving forward.

However, the Government have a role in this process. They are pouring money down the neck of Capita and for the Government to say that this issue is nothing to do with them strikes me and my constituents as remarkably detached and arrogant. Actually, the Government have a role to play in bringing people to the table, making Capita see sense and delivering justice for our constituents.

[Albert Owen (in the Chair)]

Before I call Guy Opperman, I remind Members that I will call the Front-Bench spokesmen from 10.45 am onwards. If Members wish to catch my eye and speak, will they stand up when I call Guy Opperman?

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[Guy Opperman]

I endorse the hon. Lady’s comments about the authority.

There are tremendous financial consequences here, but there is also a human one. All hon. Members—I have been here for only 18 months, but others have been here for many years—will have gone through the pain, difficulty and correspondence in relation to Equitable Life. To be fair, this situation is not the same, but it is similar in that constituents have written to me because they have given up. One told me about a retired couple in ill health who have already given up, because

“they have not the energy or the mental resolve to fight this”.

The Minister had an extremely difficult job with Equitable Life, and I applaud the fact that he did the best he could in very difficult circumstances. This matter, however, is far simpler, and I hope that he takes on board the four key points. First, will the inquiry be a section 14 inquiry? Secondly, why is the offer a closed one? Thirdly, why is the offer deadlined and time-limited? Fourthly, does the Minister agree with a large proportion of hon. Members—I say this based on the comments that have been made during the past hour and 11 minutes—that Capita has a simple choice: either it gives 100% compensation, or it is left with no friends in this House?

[Albert Owen (in the Chair)]

I shall call the Front-Bench spokespeople at 10.45 am. I now call Duncan Hames.

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[Chris Leslie (Nottingham East) (Lab/Co-op)]

I pay tribute to my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex), and to the hon. Member for Vale of Glamorgan (Alun Cairns) and other Members, for drawing attention to this exceptionally important and complex issue. It is simply not right that people, many of whom have worked hard on modest incomes and have saved money in what they reasonably thought to be a responsible way, stand to lose significant sums. We welcome the Financial Services Authority’s efforts in securing a compensatory offer from the parties involved, which will be administered through the Capita financial managers, but although up to 70% of the sum invested could be returned to investors via the consumer redress scheme, many will be dissatisfied because the amount falls far short of their original investment.

I want to make five quick points. First, on the unfair constraints on the choices for out-of-pocket investors, there have been reports that the FSA is reluctant to set out a full statement of events surrounding the Arch Cru failure, possibly until after the closure of the redress scheme. I would be grateful if the Minister would agree that that would be an extremely unfortunate state of affairs, as my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) and the hon. Member for Hexham (Guy Opperman) have indicated. The FSA should either set out its understanding and explanation while the redress scheme is extant, or the scheme’s closing date should be extended to allow the full facts to emerge before investors are forced to decide whether to accept the final settlement. Does the Minister agree that that would be reasonable?

Secondly, can the Minister clarify the potential role of the Financial Services Compensation Scheme? The FSA has been brokering the voluntary settlement scheme, but at what point will the option of claiming anything via the FSCS be made clear to investors?

Thirdly, I want to ask about the lessons to be learnt about Capita and the role of the regulators. Irregular practices clearly took place, and an investigation into the regulator’s handling of the Arch Cru scandal is merited. Hon. Friends are pressing the Minister and the Treasury to look into the behaviour of the regulator, and I would be grateful if the Minister could address that in winding up the debate. Did the regulators check Capita’s capabilities? Compliance work is usually done by banks, but the Arch Cru fund was compliance-managed by Capita and, as we have heard, questions have been asked about the adequacy of Capita’s business resourcing and its internal checking procedures for ensuring the thoroughness of its important responsibilities.

Fourthly, we must have tighter regulation of investment fund descriptions, and there is an urgent need to ensure that consumers are protected from exaggerated marketing terms. For instance, do we need clearer rules about the use of terms such as “cautious fund”? The hon. Member for Hexham highlighted the term “ideal for pension transfer”, which goes to the nub of the marketing mispractice involved. “Guaranteed investment,” “absolute returns” and “balanced funds” are all used frequently in investment schemes, but I am not sure that we have the right regulation of the use of marketing arrangements.

Finally, although we should not underestimate the pain, anger and distress that many people justifiably feel, we must consider the messages that this kind of scandal sends out to the public at large. This situation can serve only to undermine people’s confidence in saving for their future, doing the right thing by planning ahead and putting money aside through pensions and investments. Parliamentarians and the Government must consider not only the impact of the scandal on the people directly affected but its repercussions on people’s trust in financial products more widely.

[Albert Owen (in the Chair)]

I thank Members for their inventions and for keeping to time. I ask the Minister now to respond.

Oral Answers to Questions

Albert Owen Excerpts

Tuesday 6th September 2011 Commons Chamber

[Mr Osborne]

Planning costs in Britain are among the highest in the world and planning delays are among the longest in the world. That is what we are seeking to deal with, so that we get economic development that is sustainable and protects our most cherished environments. That is what we are doing. What people are beginning to see, as this debate unfolds, is that we have to take some difficult decisions in this House if we are to have sustainable economic growth in a very competitive global economy. The planning reforms are part of that plan.

[Albert Owen (Ynys Môn) (Lab)]

The massive increases in energy prices are hitting every family and business in this country. Before the general election, the Conservative party, and indeed the Prime Minister, promised to take direct action and curb excessive rises. What action does the Chancellor intend to take to cure this problem now?

Finance Bill

Albert Owen Excerpts

Tuesday 28th June 2011 Commons Chamber

[Nia Griffith]

That is an extraordinary statement, especially as I can remember the most surreal experience of being in a studio in Cardiff and the hon. Member for Brecon and Radnorshire (Roger Williams) popping up on a screen from some distant place to defend the increase in VAT. So what is the position of the Liberal Democrats? I really do not know. One minute they say one thing about an assessment, the next minute they pop up on a screen defending to the hilt every statement in the Budget last June. I do not know what the position of Welsh Liberal Democrat Members is.

[Albert Owen (Ynys Môn) (Lab)]

My hon. Friend is making a strong point about small businesses being unable to absorb the VAT increase. She asked about the position of the Liberal Democrats. They are on the wrong side of the argument and they are here tonight to defend the Tory rise in VAT. It is an absolute disgrace, and Welsh businesses and businesses throughout the UK will punish them at the next election.

[Nia Griffith]

My hon. Friend is right.

Let us move on from the small items such as mobile phone bills and the VAT on them—it might be someone’s only phone if they do not have a landline. Let us move to the other end of the scale and what are called the big ticket purchases such as replacing a car or refurbishing a kitchen. They are things that people do not have to do now, but they may choose to do; perhaps they intend to do them in the next few years. The Labour Government introduced the car scrappage scheme, which spurred on people who were thinking of replacing their car in the next couple of years to bring that purchase forward. It meant that money that was available, which some people had put by in savings, was fed into the economy and made a difference.

Amendment of the Law

Albert Owen Excerpts

Thursday 24th March 2011 Commons Chamber

[Ed Balls]

Let me turn to the detail of the Budget for a second more, but I look forward to hearing from the hon. Gentleman. I only read out five of his Labour campaigns, but maybe he will enlighten us on a sixth in a moment.

[Albert Owen (Ynys Môn) (Lab)]

The shadow Chancellor was right to remind the Liberal Democrats that they once thought that a VAT increase would be a bombshell, but does he also remember the Prime Minister, when he was Leader of the Opposition, saying that VAT was a regressive tax that would hit the poor the hardest, and that he had no intention of increasing it?

[Ed Balls]

I also remember the Chancellor saying that the Budget was progressive, and it turned out to be regressive, but my hon. Friend is being unfair to Liberal Democrat colleagues. They were not against a VAT rise; they were against a Tory VAT rise. Nick Clegg’s general election leaflets said, “Stop the Tory VAT bombshell,” and he never said, “Stop the Tory-Liberal Democrat VAT bombshell,” so my hon. Friend is being a little harsh on colleagues.

Oral Answers to Questions

Albert Owen Excerpts

Tuesday 22nd March 2011 Commons Chamber

[Mr Osborne]

I thank the right hon. Gentleman for his support—we are one big happy coalition on this issue. I will ask Treasury officials to engage with him so that we get this right. We have to work in a way that is not bureaucratic, but gets money to those who really need it. Having looked at the issue, I think perhaps the best route is to work closely with the charities that know the sector best. Let us work together and make the scheme work.

[Albert Owen (Ynys Môn) (Lab)]

3. If he will estimate the revenue to the Exchequer attributable to receipts from the increase in the standard rate of value added tax on road fuel.

[Vernon Coaker (Gedling) (Lab)]

5. If he will estimate the revenue to the Exchequer attributable to receipts from the increase in the standard rate of value added tax on road fuel.

[The Economic Secretary to the Treasury (Justine Greening)]

The VAT forecast is estimated on an aggregate basis, as registered traders are not required to record in their VAT return the type of goods or services on which VAT has been collected.

[Albert Owen]

I agree with the Prime Minister that VAT is a regressive tax that hits the poorest hardest. Today’s figures show that the rise has also pushed up inflation, hitting people in their pockets and at the pumps. Will the Treasury team look again at the VAT rise on fuel—which is hurting motorists, hauliers, businesses and families across the country—and reverse it?

[Justine Greening]

I welcome the hon. Gentleman’s concern for motorists. However, I note that when the VAT rise passed through Parliament on 13 July 2010, he did not vote against it. I assure him that the Government are looking at what we can do to support motorists, hauliers and businesses with the cost of fuel, but I have to say that his party’s proposal on VAT is illegal, unworkable and unfunded.

Fuel Costs

Albert Owen Excerpts

Monday 7th February 2011 Commons Chamber

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

I have listened with great interest to this afternoon’s debate. I intend to limit my remarks to aspects of it that relate most to the area that I represent. That part of rural Aberdeenshire and Banffshire has no railway stations and very limited public transport options—there are far fewer bus services than hon. Members will find in urban areas. This is therefore an urgent issue not just for individuals, but for businesses in remote and rural areas, and I am glad that Members on both sides of the House take it seriously.

It almost goes without saying that people who live in the more remote and rural parts of Scotland, Wales and other parts of the UK have to travel further to access the most basic amenities, whether post offices, shops, schools, places of work or doctors’ surgeries. Inevitably, they incur extra costs in doing so, yet as other hon. Members have pointed out, people in rural and remote areas pay higher prices. In parts of my constituency, they pay £1.36 per litre for fuel. That might not be quite as high a price as is paid in some of the island communities, but it is nevertheless well above the average.

[Albert Owen (Ynys Môn) (Lab)]

The hon. Lady is quite right to point out that those in peripheral or rural areas pay more because their need for the car is greater. In addition, those people need larger cars, and there is a big difference between the costs of petrol and diesel—many diesel vehicle owners are hit harder. We are talking not about Chelsea tractors, but essential means of transport in rural areas.

[Dr Whiteford]

I agree with the hon. Gentleman. I live in rural Aberdeenshire, and at this time of year, I fully appreciate the need for vehicles that are suitable for the roads on which they travel and the driving conditions.

There is a huge irony in this situation for people in my constituency, who have had an oil terminal on their doorstep for many years. People who live at the heart of Europe’s oil and gas industry pay among the highest prices for petrol and diesel in Europe. That irony is certainly not wasted on folk in my part of the world. Nearly 62% of what we pay at the pumps goes directly in tax and duty to the Treasury. My concern—this is the chief point that I want to make this evening—is that that is a disproportionate tax on people who live and work in rural and remote areas.

--- Later in debate ---

[John Thurso (Caithness, Sutherland and Easter Ross) (LD)]

There are two issues in the debate, which I would like to try to disaggregate. One is the high premium paid in rural areas and the specific circumstances that apply to it. The other is the general high cost of fuel in the country. Let me deal with the two separately.

Briefly, the derogation for rural areas exists because there is a premium to be paid in those areas. Many Members have provided the arguments, so I will not go over them all again. However, I would point out that it exists not simply because there is a premium. I have researched the issue over many years, so I can tell hon. Members that I have often found that a certain petrol station in Sloane avenue is in the top three or four for prices. That shows that it is not simply a matter of high prices; the problem is that there is high price, a premium and a lack of public transport, coupled with the other deprivation typically seen in the more remote rural areas. It is not high prices alone, but the combination of all those factors that counts.

Secondly, as a number of hon. Members mentioned, I wrote a paper on this subject and it dealt with all the elements that cause worry—imperfectly, I am sure, but the hon. Member for Wallasey (Ms Eagle), who was the Exchequer Secretary at the time, took it seriously and her officials looked at it, so it was reasonable enough. I would like to think that the imperfections contained in that scheme are currently being ironed out and that we will shortly know what the Government intend to put forward.

I want to deal more fully with the other question of the generally high price of fuel. I commend to anyone who has not yet had a chance to read it the note produced for this debate by the Library. Among other things, it contains some very interesting facts. For example, it points out that for a number of years, the cost of motoring has actually gone down in this country in real terms, whereas the cost of public transport has by comparison gone up. One of my successors as Liberal Democrat transport spokesman often used to point that out.

It is also interesting to look at the percentage of tax take. The total has varied from a high of about 89% at one point in the ’90s down to the high mid-50s and now back up to 63%. The tax take in real terms today is about equivalent to that of 1997-98. We need to get our facts right and look at the issue in perspective.

We need to take account of some of the external factors. They must include the fluctuation in the oil price, which has once more hit $100 a barrel. A number of economists believe that that is merely a resumption of the upward trend that existed before the recession. It is entirely possible that the price will rise further, in which event we shall have to deal with the consequences of a high fuel price for our economy.

I congratulate the Government on giving thought to the introduction of a fuel stabiliser, although I have some doubts about the practicalities. There is only one thing worse than a stabiliser that works, and that is a stabiliser that does not work, so if we are to have one, let us ensure that it works. However, we might consider how the Government could, as it were, be removed from the equation. There are a number of possibilities, and I should like my hon. Friend the Minister to investigate them.

The first possibility involves VAT. When the last Government reduced it to 15% they also increased duty by 2p, and that remained when VAT rose again. Thus a relationship was established between VAT and duty. I suggest that the reverse should apply: that VAT on fuel should be 5%, in line with VAT on heating fuel, and that the duty should be altered to an amount that the Government considered appropriate. That would remove the variability that comes from the market. It would not affect the Treasury, and it would not have some of the deficiencies of the stabiliser. It is an imperfect mechanism, but it would be of some small comfort to know that when the price at the pump rose, it would be largely a result of what the oil companies were doing rather than what the Government were doing.

[Albert Owen]

I agree with the principle of a stabiliser. However, the Government talk of having “inherited” the duty increase. In 1997, the Labour Government inherited a Conservative proposal to raise VAT on domestic fuel and then “disinherited” it. Is the hon. Gentleman suggesting, as I am, that the Conservatives should “disinherit” the duty increase? That would help people in his area and in mine.

[John Thurso]

I am, in fact, presenting the Minister with a novel suggestion which I hope he will consider in the Treasury, and which might benefit us all.

Let me make another point about the current regime. I happened to note that if the escalator were introduced, it would be based on the retail prices index. Perhaps the Minister would consider basing it on the consumer prices index, which would be in line with the rest of Government thinking.

Finally, let me express a view on an issue that I studied in some detail when I was my party’s transport spokesman. I believe that the whole way in which we tax fuel is wrong. In my opinion we should not tax it at all, but should adopt a proper method of variable road user charging. Through that mechanism, we could both raise the amount of money that we wish to raise and incorporate all the fairness that we seek. It would require those who are most able to find alternatives, and who use the most congested roads, to pay the most, while allowing those with the most need—most of whom live in the least congested areas—to pay the least, and it has been suggested by most academics in the field of transport.

I have a funny feeling, Madam Deputy Speaker, that when I first raised the issue of road user charging in a Westminster Hall debate in 2001, it was you who responded from the Dispatch Box. I hope that the Government will seriously consider introducing such a system, because it would enable us to escape from the groundhog day of the fuel duty debate which comes round at least once a year, and adopt a sensible method of charging for road use that would be both green and economically efficient.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Diolch, Madam Deputy Speaker. I am delighted to have the opportunity to close the debate on behalf of the Plaid Cymru and SNP group. Our combined parties have campaigned on this issue for a number of years, not least in tabling amendments to Finance Bills in 2005 and 2008. It is somewhat disappointing that, in our first Opposition day debate of the Session, we must once again highlight the need for Government intervention to stabilise fuel prices.

Fuel prices are driven by the global price of oil and by domestic taxation. In the case of global oil prices, the trajectory is likely to go in only one direction, as oil is a finite resource. It is already being traded at over $100 a barrel. As the world economy recovers, the price will rise further as a result of increasing demand, especially from the emerging countries and, in particular, China. Volatility will only be exacerbated as we reach peak oil. Oil prices will also inevitably increase as a result of the long-term deflationary policies of the United States Government. Oil is traded in dollars, and a weakening dollar pushes up oil prices as producer countries try to make up for the shortfall of a currency whose value lessens. I echo the call of the French President, Mr Sarkozy, for a long-term agreement between oil-producing and consumer countries to offer more stability on prices.

Fuel prices are obviously influenced by domestic taxation, and it is with that element that we are concerned today. Duty on fuel in the UK represents about 65% of the price of fuel at the pump, if my sums are correct. Clearly, the higher the price of wholesale oil, the higher the tax receipts raked in by the Treasury. As is shown by an excellent House of Commons Library research paper, petrol duty in the UK is the second highest in the European Union, and the duty on diesel is by far the highest. While most other countries impose different levels of duty on road petrol and diesel, the UK’s rates are exactly the same, which means that the UK’s diesel prices are far higher than those of our European partners.

There are three general reasons for the need for a mechanism to stabilise fuel prices via control of duty. First, the volatility of fuel prices has far-reaching social and economic consequences, and we therefore need a mechanism to dampen the peaks and troughs. Secondly—as we have heard in a number of notable speeches today—surges in prices have a disproportionate effect on some sectors of the economy, some sections of society, and some geographical parts of the state. Thirdly, green taxes must be linked to clear environmental criteria, because otherwise the public will believe they are just another cash cow and there will be a loss of support for environmental taxation. That would be a disaster, in view of the challenges that we face as a nation and, of course, throughout the world.

Let me stress that we are not arguing for the introduction of something new and untested. Many OECD countries have mechanisms to regulate the price of fuel. France has a fuel regulator, and Canada even has a regional fuel stabiliser. If we were to adopt a similar system in the United Kingdom, I should like to advance a special case for south-west Wales.

In adopting our policy following the Finance Act 2008, the Conservative party’s 2010 general election manifesto stated:

“We will consult on the introduction of a ‘Fair Fuel Stabiliser’. This would cut fuel duty when oil prices rise, and vice versa. It would ensure families and businesses and the whole British economy are less exposed to volatile oil markets, and that there is a more stable environment for low carbon investment.”

I could not agree more, and I look forward to the support of hon. Members who stood for election on the basis of that manifesto commitment when the House divides later this evening.

We have had a very interesting debate, featuring many positive and informative contributions. The hon. Member for Dundee East (Stewart Hosie), in his usual ultra-detailed opening remarks, made a comprehensive case for the need for a stabilising mechanism. I urge those who missed the beginning of the debate to read his speech, and I hope one day to be able to rival his knowledge of these matters. He made the specific point that rising fuel costs constituted a significant economic headwind. Given the recent deliberations about the Government’s lack of a growth strategy, I humbly suggest that that is one idea that they should fully embrace.

The Minister defended the Government’s position admirably by blaming the previous Administration, but while we welcomed her comments about the rural derogation pilot and look forward to further progress, her suggestion that the devolved Governments could intervene to reduce the burden on families was somewhat weak. Much as I should like the Welsh Parliament to have the taxation powers that would enable it to intervene, this is a matter for the United Kingdom Government. They need to take the necessary responsibility and introduce proposals of their own, rather than blaming the previous Administration and placing the onus on the devolved Governments without giving them any power. That seems to have developed into a growing theme in recent months.

The hon. Member for Bristol East (Kerry McCarthy) confirmed that the Labour party opposes any stabilising mechanism. I am sure that colleagues who will fight Welsh Assembly elections and Scottish parliamentary elections in a few months’ time will remind electors of Labour’s policy.

The hon. Member for Morecambe and Lunesdale (David Morris) noted the problems that small companies—notably the haulage industry—face in his constituency.

As usual, the right hon. Member for Torfaen (Paul Murphy) spoke with great authority. He concentrated on the importance of small and medium-sized enterprises to the Welsh economy. I echo his views and look forward to his support in the Lobby later.

The hon. Member for Argyll and Bute (Mr Reid) highlighted the specific problems faced by communities in the Scottish islands, and I thank him for his contribution.

My hon. Friend the Member for Banff and Buchan (Dr Whiteford) made a strong case for the food processing industry in her constituency. She discussed the added burden that that industry faces as a result of spikes in the price of oil.

The hon. and learned Member for Sleaford and North Hykeham (Stephen Phillips) made a staunch defence of the Government’s position. We would welcome a derogation pilot in England, as he suggested, because if it worked in remote parts of England it would work in Wales and mainland Scotland, too.

[Albert Owen]

The hon. and learned Member for Sleaford and North Hykeham (Stephen Phillips) is not in his seat, but he said that only areas with devolved Administrations have been proposed for the pilot. The Isles of Scilly are, as we all know, in England. Wales has been left out, but surely the Isle of Anglesey would be the ideal place to experiment with such a derogation.

[Jonathan Edwards]

The hon. Gentleman makes a strong point. I am sure that the Assembly Member for his area, who is a member of my party, agrees with his comments.

My hon. Friend the Member for Na h-Eileanan an Iar (Mr MacNeil) discussed how fuel prices in his constituency have reached the £1.50 a litre mark. Having visited his beautiful constituency last week as a member of the Welsh Affairs Committee, I can inform my hon. Friend that his effort on that issue is appreciated.

The hon. Member for Mid Norfolk (George Freeman) highlighted how the rising fuel price hinders economic growth, especially outside south-east England and in those sectors of the economy that the UK Government are depending on, if they are serious about their stated aim of rebalancing the economy.

My hon. Friend the Member for Angus (Mr Weir) highlighted the huge problems caused to small businesses in his constituency. He pointed out the impact on disposable income for working families in his valid contribution.

The hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) made an informative speech. He made a powerful argument about changing the VAT rate for fuel, and I hope that Ministers will consider his ideas.

In their joint economic declaration last week, the devolved Administrations specifically called on the UK Government to take action to counteract rising fuel and transport costs. The Governments of Wales, Scotland and Northern Ireland all highlighted how rising fuel costs form a significant economic headwind that undermines efforts to rebuild after the recent downturn. The declaration called for the postponement of the proposed duty increase planned for April this year. I am sure that all the Celtic Governments support the need for a fuel duty stabiliser.

In closing, I want to refer to those bodies that have contacted us to support our motion. We have received overwhelming support from many diverse organisations, such as the Farmers Union of Wales, NFU Cymru, the Freight Transport Association, the Road Haulage Association, the Federation of Small Businesses and the Countryside Association. That diversity reflects our point that ordinary families, businesses and workers across the UK acutely feel the effects of volatile fuel prices, although rising fuel duty will inevitably hit rural communities hardest.

Gareth Vaughan, president of the FUW, has written to say how “grossly unfair” it is that we in the UK pay more than any other country for our fuel, because of the “extortionate level of tax” imposed by the UK Government. He added that

“bearing in mind that there is a difference of as much as five pence per litre between rural and city garages in Wales already, the added fuel duty coupled with rising oil prices will be devastating to rural communities all over the UK.”

Jack Semple, director of policy at the Road Haulage Association, has stated:

“The Road Haulage Association welcomes Plaid’s and the SNP’s support for a fuel duty stabiliser”

since

“the volatility of fuel prices is a major issue for hauliers and, increasingly, for their customers.”

John Walker, the FSB’s national chairman, has also endorsed our approach, reminding us that

“Every extra penny spent at the pumps is a penny not being spent elsewhere in the economy…Small businesses want to grow...and create employment but the cost of fuel puts the brakes on their ability to drive the recovery.”

Finally, the FTA has stated:

“Lives and livelihoods up and down the country are suffering in the face of unsustainable and crippling fuel costs. This cost is unsustainable and...as part of the Fair Fuel UK Campaign, the Freight Transport Association and the Road Haulage Association, along with backing from the RAC, are asking government principally to scrap the fuel duty rise planned in April and introduce a methodology for stabilising fuel prices.”

It is not only organisations and individuals outside this place who have backed our campaign. In introducing his plans for a fuel stabiliser in 2008, the then shadow Chancellor—the current Chancellor—described the stabiliser as

“a common sense plan to help families, bring stability to the public finances and help the environment by making the price of carbon less volatile”.

In the light of those comments, people across the UK will ask why his Government oppose our motion today.