Finance Bill

I do not know about thanking the Liberals, but I should thank the hon. Gentleman for his detailed demolition of some of the most obvious practicability problems, as he called them, with the new clause. I express again the sympathy that I have expressed before for some of the problems caused by higher pump prices in rural areas than elsewhere in the country. However, they are high not because of tax rates but because of high distribution costs and the typically low-volume throughput of rural petrol stations. The problem is not one of market failure, as the hon. Member for Falmouth and Camborne (Julia Goldsworthy) contended, but of low market demand. That is at the root of the problem, and I have not heard a strong enough case to justify using tax to interfere with, and in some way direct, the commercial process of price setting. Other, more environmentally friendly ways exist to help people facing additional costs. We have debated on other occasions the Scottish Executive’s rural transport fund, which has helped more than 150 rural community transport schemes since 1998. Moreover, the Commission for Rural Communities has found that Government policies on transport in rural areas have made a significant difference in the fight against disadvantage there. There are problems with how to define ““rural”” or ““remote rural”” areas, with whether eligibility should depend on the registration of the vehicle or on the driver’s residency, and with the fact that the cost of fuel is part of the overall cost of living. In fact, housing is more expensive in many urban areas than it is in most rural areas but, leaving all that aside, we must be really clear about what the new clause would not achieve. The new clause would not guarantee any reduction in the prices that people pay for their petrol or diesel at the pumps. That is because it would be impossible to guarantee that a fuel supplier who would benefit from any duty reduction under the proposed arrangements would pass it on to his customers—especially in areas with little competition, such as those that the Liberal Democrats are concerned about.