Charlie Gordon (Glasgow Cathcart) (Lab): I was talking to the minister on the telephone the other day and I mentioned that I saw some snowdrops in Glasgow last weekend, but I said, “Keith, before you rush off to the control room, they were the flower snowdrops, which are a sure harbinger of spring.” This is the fourth spring in a row that we have had a debate here at Holyrood on fuel duty and we are in by far the most severe circumstances of those four years. Families out there are hurting from rises in the cost of living generally, and everyone in the UK—directly or indirectly and to a greater or lesser extent—is adversely affected by high fuel prices.

Labour has consistently opposed the increase in VAT to 20 per cent, which has helped to push up fuel prices to their current record levels at a time when world oil prices are high for reasons that we do not need to go into. With the economic recovery of the UK not yet secured, this VAT on fuel is the wrong tax at the wrong time and it is hitting families and businesses hard.

Labour is calling for the UK chancellor, George Osborne, to take immediate action on fuel prices to ease the pressure on families who are already facing a tough year, with their incomes squeezed. George Osborne should not just forget about the next increase in fuel prices, which is scheduled for April; he should reverse the VAT increase on fuel, which has added nearly 3p to the cost of a litre of petrol at a time when world oil prices are rising.

We know that, according to the House of Commons library, the VAT rise will generate around an extra £700 million of revenue for the UK Treasury this year. Perhaps it is less well-known—this was also identified by the House of Commons library—that the Treasury is also to have another windfall of some £800 million in additional tax income from the banks.

Let us be absolutely clear: in the budget, George Osborne should forget about any planned increase in fuel duty, which could be in the range of 1p to 4p on a litre of fuel. We say that he should also reverse the VAT increase on fuel using the bank levy and cut the cost of a litre of fuel by some 3 per cent.

Gavin Brown: Does the member acknowledge that the planned increase was originally planned by Alistair Darling when he was chancellor.

Charlie Gordon: Every UK Government makes provision for an increase in fuel annually, but it is a matter of fact that the previous Labour Government often postponed planned duty increases when world oil prices were on the up, as they are now.

What about the fuel duty stabiliser that George Osborne and David Cameron promised before the election? According to the Scottish Parliament information centre, the Conservative party’s 2010 general election manifesto said:

“We will consult on the introduction of a ‘Fair Fuel Stabiliser’. This would cut fuel duty when oil prices rise, and vice versa.”

Also according to SPICe, the manifesto of the Liberal Democrats, who helped to give David Cameron the keys to number 10, said:

“a rural fuel discount scheme ... would allow a reduced rate of fuel duty to be paid in remote rural areas, as is allowed under EU law.”

It came to light recently that Liberal ministers had been rather tardy in even corresponding with the European Union to progress that idea.

Liam McArthur: The process of negotiations with the European Commission can take far longer than any of us is comfortable with, but does Charlie Gordon accept that, whatever glacial pace the negotiations are proceeding at, they are at least taking place? That did not happen under the previous UK Labour Government.

Charlie Gordon: It is true that the Labour-led Executive did not initiate discussions with the European Union about a rural derogation; it introduced practical grant aid to rural petrol stations, to which the minister referred. That is practical help.

It is easy to talk, to be a “gaunae” and to break promises, but it is much harder to deliver for people in situations that I admit are complex.

Stewart Stevenson (Banff and Buchan) (SNP): Does Charlie Gordon recall that, in our previous debate on fuel prices on 15 April 2010, the Labour Party alone voted against the motion to
“reduce the price of fuel in specified remote ... and island areas of Scotland”?

Is the Labour Party making a U-turn? Will it join other parties in supporting the motion tonight?

Charlie Gordon: We are not making a U-turn, because a derogation for rural areas is not in the Government’s motion. That does not mean that the Labour Party is not still very interested in the idea, but it is—unfortunately—for another day.

In September 2010, the Office for Budget Responsibility—which Tory Prime Minister David Cameron established—reported on the idea that is in the motion, which is a fuel duty regulator. It argued that a permanent increase in oil prices would have a negative impact on public finances after a year and said that, because of other complex mechanics in the UK’s finances, a fuel duty regulator would to all intents and purposes not work. That is why we are reluctant to endorse the proposal. The UK Government’s new advisory body says that it would not work and would not deliver what the Conservatives in the UK Government said in their manifestos they wanted to do.

We focus on practical assistance to the families who are hurting today. I began—as we in this country often do in many circumstances—by talking about the weather. An old joke is that everybody talks about the weather but nobody does anything about it. The families out there who are hurting because of high fuel prices want more than talk, broken manifesto promises and the impotent politics of grievance. They want lower fuel prices now. That is what Labour is fighting for from the Tory Government.

I move amendment S3M-8032.1, to leave out from “and implement” to end and insert:

“and to reverse the recent VAT increase on fuel”.