---

Finance Bill

The new clause is about windfall gains and VAT. If the price is dropping, there are no windfall gains, so the new clause is not triggered. It is a one-way, modulating, smoothing clause. I forsake the Liberal Democrats in order to take on a trite point from Labour Members about whether a forecast already exists in the Red Book. Yes, we know that there is a forecast—I have been debating it for many years with successive Chancellors of the Exchequer. But if a statutory mechanism is proposed, that forecast has to be in statute. If the Chancellor decided for some reason not to make the forecast, the rest of the provision would fall as a result. That is a reasonably obvious point. I know that the hon. Member for Eastleigh (Chris Huhne) is new to the House. If he ever makes a proposal similar to this one, he will find that he will also have to put the dependent mechanism into statute. As has been said, the UK has the highest fuel taxes in Europe, especially for derv. For a variety of technical reasons to do with refineries, the price of derv is rising faster than the price of petrol in the oil market. The situation is very serious. My hon. Friend the Member for Angus (Mr. Weir) said that his constituency has one rail line. Mine has none: there is not one metre of railway in Banff and Buchan, so there is no alternative to road haulage for the transport of goods to market. The high price of derv is very serious because it means that the percentage of goods being moved by UK hauliers is falling like a stone, as they cannot compete with their counterparts in other European countries. As my hon. Friend the Member for Dundee, East (Stewart Hosie) said, the number of bankruptcies in the haulage and transport industries is rising exponentially. I have here a graph that explains the reality, and why the Scottish Nationalist, Plaid Cymru, Democratic Unionist and Ulster Unionist parties support this new clause. The highest fuel prices in this so-called ““united”” kingdom obtain in Northern Ireland, the highlands and islands of Scotland, rural Wales and parts of rural England. That is why we are pleading with the Government that something must be done. The new clause is about windfall gains. The Red Book forecast an oil price of $40 a barrel. It estimated oil revenues from corporation tax and petroleum revenue tax at about $6 billion. The average price of Brent light so far this year has been $55 a barrel. The House of Commons Library puts the windfall gain for the Chancellor at £5 billion, if the price rise is maintained throughout the financial year. The Chancellor has decided to forgo an increase in the fuel duty, at a cost of about £200 million. The additional mechanism suggested in the new clause would cost another £200 million, and be offset by the increase in VAT revenues. This new clause would have a modulating or smoothing effect. It asks the Treasury to give back a tiny proportion of its windfall gains from high oil prices to help hard-pressed people in our constituencies. I have known the Financial Secretary for some years; he is one of the Government’s more successful and able Ministers, and he has a lively and inventive mind.