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Finance Bill

Their excuses are laughable, and the joke has worn rather thin for my constituents over the years. There was a time when I began to think that we were making a small degree of progress on this issue. On 24 April last year, I raised the matter with the Chancellor in Treasury questions. He accepted my argument, and spoke of his own personal experience. He said:""Having filled up my car with diesel in Lewis just a couple of weeks ago, I am acutely aware of how high the petrol prices are."" He went on:""I am struck by the variation in petrol prices across the highlands and islands; they vary substantially…the price of diesel seems to vary quite a bit depending on which side of the Minch one is on."—[Official Report, 24 April 2008; Vol. 474, c. 1461.]" I will return later to the point about stretches of water but that was the Chancellor accepting our argument. It does not get much better than that. The Chancellor accepted that he knew about the problem because he had a family connection with the western isles. As a result of that exchange, I was offered—and accepted—a meeting, to which I took the hon. Member for Na h-Eileanan an Iar, my hon. Friend the Member for Argyll and Bute (Mr. Reid) and the president of the National Farmers Union of Scotland. I give all credit to the Minister for the conduct of that meeting. It was very open, frank, friendly and constructive. It was held on 4 June, and the conclusion was that Treasury officials would come up with an analysis of the proposal, that proper authoritative work would be done, and that we would then reach some conclusion. Summer turned to autumn, and autumn turned to winter. On 24 November, the Minister wrote to me. I thought, "Well, this is great. We have waited five and a half months. There will surely be at least three volumes coming our way." Instead, we got a two-page letter that did absolutely nothing other than restate the rather laughable reasons that had been used in the past to block this eminently sensible measure. I felt a bit like a child waking up on Christmas morning and finding only ashes in my stocking. First, the observation was made that the high price of fuel was""the result of market conditions, in particular the extra costs involved in transporting fuel to relatively inaccessible locations."" I appreciate that, when viewed from the Treasury, Orkney and Shetland might seem like an inaccessible location, but is the Minister really telling us that the 15p a litre premium that is paid by my constituents is simply down to transportation? I do not believe that nonsense, and an instance recently brought to my attention refutes it. For some time, fuel has been supplied to us in Orkney by a company from Caithness. It is taken from Gill's Bay, on the less fashionable side of the Pentland Firth, to St Margaret's Hope in South Ronaldsay, on an open deck in a road tanker. For some time that option was not available, so the company in Caithness took it in a tanker from Caithness down to Aberdeen, put it on a ferry and took it to Orkney. It was able to do all that at a price lower than that charged by the local supplier. Surely we can all now accept that whatever the reason for the increased price of fuel in my constituency, it is nothing to do with road transport. The Minister made two more points in her letter. I hope that she will explain the basis of her thinking, because what we see in these letters is not a reference to the substantial work that we were promised, but merely the politics of assertion. She wrote that a fuel duty rebate was""likely to increase the amount of duty lost through fraud"" —I must say that I am less than impressed with the slight to my constituents—""by creating greater opportunities and incentives for false accounting or fuel smuggling."" The Minister offered no evidence in support of that assertion, although she had five and a half months in which to come up with it. When she responds to the debate, will she undertake to place the evidence that she acquired over those five and a half months in the House of Commons Library? We shall wait to hear what she has to say. The second point that the Minister made in her letter was:""Having different duty rates in different areas could well create perverse incentives for motorists to drive further in order to fill up on 'low-duty' fuel, both distorting the fuel market and resulting in an increase in CO2 emissions, contrary to the Government's policy of seeking to reduce polluting emissions."" I consider that to be the most illuminating example of Treasury thinking that we have seen so far. The Minister honestly presents to us, and expects us to take seriously, the proposition that someone will embark on a 12-hour ferry journey from Aberdeen to Shetland in order to buy petrol that will still be about 10p dearer than it would have been in Aberdeen. That is obviously the way in which the Treasury's mind works, and when we understand that, we understand why the economy is in the mess that it is in today. My hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander)—who, unfortunately, is no longer in the Chamber—referred to the impact of high fuel costs on prices, which I think is widely accepted. There is, however, an even wider impact. The higher prices paid by people in our communities make living in those communities that much more difficult. As a consequence of the increased costs, we see the continuation of population drift—and if there is a single threat to my communities that is greater and more immediate than the high cost of fuel, it is a declining population.