Northern Ireland Assembly Flax Flower Logo

Northern Ireland Assembly

Monday 18 September 2000 (continued)

Mr McCartney:

Not just at the moment.

For some hauliers, proximity to the border makes it viable for them to go into the Republic. They are filling up their vehicles in the Republic as much as they can. Many major haulage contractors have also registered their vehicles in the Republic because the vehicle licensing excise duty fee there is about a third of what they pay in Northern Ireland. The effect of Northern Ireland-registered vehicles filling up in the Republic is to pour millions into the coffers of its Treasury.

Many informed sources believe that up to 30% of all motor fuel used in Northern Ireland is unlawfully imported from the Republic. It is imported through the border areas of south Armagh and, to a degree, Fermanagh. It is imported through areas controlled by paramilitary groups which, if not actually running these unlawful operations, are undoubtedly extracting licensing fees. Huge amounts of money are providing a financial base for terrorism that will threaten our entire society, North and South. The political representatives of some of those people are in this Assembly. They have the approach of whited sepulchres, and they make speeches in the Chamber attacking the British Treasury.

There is no doubt that the Chancellor is good measure for a significant degree of criticism, as many Members have already indicated. However, Mr McGrady, for the SDLP, was strangely silent on his partners in the pan-Nationalist front, who are undoubtedly delighted that the British Treasury is rightly getting stick. They, and the groups that they represent, are contributing in no small part to the difficulties experienced by honest and decent lawful traders in Northern Ireland.

It was mentioned that some 60 petrol retailers have gone out of business in the last year. I have information about a petrol retailer who puts up a notice on his station stating "The only fuel here is legally obtained". He does this in a psychological endeavour to compete with a petrol station some one hundred yards away that is grossly undercutting him by selling fuel at a price at which the lawful trader cannot even purchase it, let alone sell it.

In my constituency I have had other people with small businesses - running newspaper and tobacconist shops - who buy their cigarette and tobacco stock from a lawful source and who cannot compete with those around them who are flogging contraband goods brought in by paramilitaries. I have to say that the paramilitaries concerned are not of the green variety, though my oft-stated view in this Assembly is that I have absolutely nothing but loathing for paramilitaries, whether they be orange, green or polka-dotted. However, I loathe the hypocrisy of those, such as the representatives of Sinn Fein and, to a lesser degree, Mr McGrady, who have attempted to soft-pedal the fact that the corruption that is spreading from paramilitary activity is beginning to invade every stratum of society.

Many of those who can afford to drive expensive, powerful cars and provide a four-wheel-drive vehicle for the missis to pick up the kiddies, and even those who are driving a business car or a company vehicle where they can write-off the increased duties to their tax and reclaim the VAT, are prepared to admit that for them the increases in petrol fuel are relatively unimportant. However, for the haulier, the farmer, the fisherman, the small businessman, the manual worker who needs his vehicle to get to work, the retired resident in a rural area on a fixed income, a car and such transport is not a luxury. It is a fundamental and basic necessity.

Society is being corrupted because, for the sake of maintaining what passes for peace in the form of a terrorist-controlled ceasefire, there has been a marked reluctance by this Government to provide a strategy for the Customs and Excise to deal with a problem that will lead to grave difficulties, not just for those on the margin, but, ultimately, for some of the larger players.

A major company operating in the fuel business - a major employer with assets of over £100 million - has already indicated that such have been the cuts in its profit margins due to smuggling that withdrawal from the Province is increasingly becoming a viable consideration.

The Chancellor must act, and he must act soon. With everyone in the Assembly, and most law-abiding citizens, I endorse the view that at present we should be attempting to avoid blockades that would damage the foundations and base of our commercial and other businesses.

I sympathise with those industrialists and bigger players who feel that the blockade might do irreparable damage, but I issue this warning. A point will come when those who are against the wall will look after their interests and those of their families. It will be all very well for those at a higher level to say there must be no blockade. Some people will have no alternative. They are the small petrol retailers, who are going out of business, and the farmers.

Farmers have to pay for fertiliser, feed and stock to be hauled onto the farm and produce to be hauled out. They are faced with escalating transport charges and see profits from pork, beef or lamb production going down the Swanee.

(Mr Speaker in the Chair)

It is vitally important that we persuade the Chancellor to listen, for he has not listened. He has told us lies and he has fabricated untruths. He has designated what were largely peaceful blockades as peaceful - so peaceful that many Chief Constables could not arrest people because they were not committing any offence.

We saw macho-man Blair come on and say he was going to do X, Y and Z, and that everything would be rolling in 24 hours. In today's 'Daily Telegraph', Siôn Simon - a Labour apologist - described these people as terrorists. Mr Blair was going to do the most dreadful things to them. Yet we are faced with his sickening, absurd surrender to paramilitarism and terrorism that is destroying the whole base of society, not just on the Shankill but now in North Down. All strata of society must get together. If we do not look after the small petrol retailer, and the farmers who are mortgaged up to the hilt and who have never drawn a penny of public welfare in generations, it will only be a matter of time before this poison spreads to higher levels in society.

We should remember these words of John Donne:

"And therefore never send to know for whom the bell tolls".

No man is an island. No stratum of this society is an island, because if something is not done to help those most grievously at risk at the present time, then for sure the bell will toll for all of us.

Mr Speaker:

A substantial number of Members wish to speak, reflecting the level of concern about this issue. I propose to continue through the lunch period. We must break at 2.30 pm through to 4.00 pm for Ministerial questions, but we will then resume the debate and take it through to 6.00 pm. Even with that substantial period, I have to ask that Members do not go beyond their 10 minutes. If the Members listed take 10 minutes each I will have to bring speeches to a close. This is an attempt to make sure that all Members get a chance to express themselves.

1.30 pm

Mr Kennedy:

I am grateful for the opportunity to participate in this important debate. I will restrict myself to the time you have mentioned, Mr Speaker. I am grateful to my Colleagues Mr Beggs and Mr Dodds. This is an extremely timely and important debate in the context of events outside this House, in other parts of the United Kingdom and in the Irish Republic.

I am also conscious that this is not a new crisis emerging only over recent days. It has existed for many months - since 1997 at least. It has already caused job losses and the closure of many small businesses, road haulage firms and petrol retailers and, in my constituency of Newry and Armagh all those businesses have been affected by the crisis.

I am also aware that the Assembly has no responsibility in this matter. It is a reserved matter. Nevertheless, I hope the Secretary of State will take the opportunity to listen to the views of this Assembly albeit via Hansard. It is crucial that the views of this House are reflected in the strongest possible terms to the Prime Minister, the Chancellor of the Exchequer and other members of the Cabinet.

I wish to concentrate on the plight of the petrol retailers, many of whom have made representations to me. It is very clear that successive Chancellors, irrespective of party, have used fuel excise duty as a way of generating Government money to put various schemes and policies in place.

The creation of the fuel escalator combined with the exchange rate difference, especially in relation to the Irish Republic, has created a lethal cocktail which many local operators have been unable to withstand. Approximately 90 legitimate retailers have gone out of business over recent months. Government statistics confirm that sales of legitimate fuel have effectively been halved since 1994. However, there has been a 20% increase in the number of vehicles on the roads in Northern Ireland.

It remains inexplicable how any Chancellor representing any Government can afford to lose in excess of £300 million in revenue. That is the conservative estimate available at this time. One wonders what this Assembly could achieve with that amount of money in spending priorities. Consequently, many long-standing legitimate petrol retailers have gone out of business. They have gone out of business only to be replaced by spivs and highly questionable opportunists, many of whom have links to the paramilitaries.

I take this opportunity to register my concerns, and those of many in the fuel industry, about the flagrant and open abuse of the sale and illegal transportation of fuel in border areas, organised and controlled by paramilitaries that are mostly, but not exclusively, Republican. Government failure to adequately resource a proper Customs and Excise response to this problem makes me extremely suspicious that there may be political reasons for not dealing with this issue properly. I sincerely hope that is not the case. As I travel the roads of south Armagh I see tankers and lorries travelling on minor roads, some of them on approved roads, bringing their cargo. The illegal operation is quite alarming and must be addressed urgently.

Urgent action is required if this important sector of our economy is to be rescued. The cost to the local economy and the environment has already been too high. At last, public opinion on this matter has been mobilised by the clever tactics of the various sectors to highlight and expose the greedy Treasury.

I pay tribute to those in the rest of the United Kingdom, and in Northern Ireland, who have organised and mobilised people on this issue. They have caught the spin doctors on the hop and the Government have been shaken to their very foundations. The Prime Minister has now been given an opportunity to address the situation. The petrol retailers and the people of Northern Ireland demand that he and his Government take urgent steps to reduce excise duties and deal with the widespread problem of fuel smuggling in Northern Ireland.

Mr Dallat:

It is essential that the Assembly present a united front on this very important issue.

It is with regret that I detect a further split in the United Kingdom Unionist Party, with Bob McCartney, the intellectual, now being voted out of the House.

We do not want to add to the hothouse gases; we want to present concrete proposals that will assist the haulage and farming industries and other elements of society that are suffering because of the high cost of fuel.

Mr McCartney's attack on my Colleague Eddie McGrady was disgraceful. For many years he has stood up and spoken out against all forms of violence. He would in no way condone the continuing activities of any paramilitary group. I am sorry that Mr McCartney has not remained to hear my response.

I reiterate Mr McGrady's very sensible suggestion that at least part of the answer to this problem can be found in the European Union. Through our involvement in the Assembly, we are constantly reminded that we cannot infringe European laws. This problem has a European dimension. As Mr McGrady has already pointed out, there are special arrangements in other parts of the European Union to take account of tax differentials which cause trading problems. I suggest that we take our case to Europe. Let us assume that our British friends will not stand in our way by saying that this is an internal, domestic problem. This is a serious crisis that is impacting on the lives of thousands of European citizens. The European Union has not only a right but a responsibility to be part of the solution to a problem that is caused directly by political land boundaries between member states.

The oil crisis did not start last week or last month. It has been developing since the 1970s because successive British Governments found it too easy to put tax on fuel as a convenient means of raising revenue. The difficulty with this particular fiscal policy is that it results in the highest rate of taxation on fuel in the developed world. This policy has already been described as a rip-off, and I agree with that. The term "Rip-off Britain" is commonly being applied to an economy where it is not just the cost of fuel that is crippling the lives of ordinary, decent people. There is a rip-off on many consumer goods as a direct result of unfair taxes. An internal report prepared for the Treasury shows that furniture and carpets are, on average, 56% more expensive than in other European countries. Sporting goods cost 31% more, while cars and motorbikes set the consumer back an extra 29%. Electrical goods are, on average, 22% more expensive.

Today's debate is focused on fuel and tax and, therefore, on road hauliers in particular. That other industries are also facing serious problems because of the differential between the cost of goods here and in other European countries cannot be ignored.

I am pleased that some Members made reference to the farming industry. We all know that that economy has been decimated by a number of factors including a poor market, but now it is being crucified by the escalating price of oil. Farmers are a critical part of the rural community, and Ministers in the Assembly have an important role to play in highlighting the impossible position that they find themselves in.

The car industry is facing serious difficulties due to the price differential with imports not only from the Republic but also from mainland Europe. Tax is part of the problem, but there are other issues which the Government have failed to act upon. We are a part of a rip-off economy which needs to be resolved, but the Government are doing nothing about it. Fuel, as we have been told, is now twice as expensive as in the Republic and four times more expensive than in the United States of America. The high cost of fuel adds to the cost of all goods and services, and the people who suffer most are those on low incomes. While the Government might claim that taxation is needed to fund Government services, the people who are penalised most are those whom the Government would claim they are supporting, namely those in greatest need - and, again, I emphasise the farming and rural industries.

The question remains unanswered as to where taxation will come from to fund the Health Service and so on when oil runs out in 2030, or at best in 40 years' time. How much of the present tax is spent on developing alternative forms of energy? I suspect very little. The environmental issue is often used to justify the high cost of fuel but this policy, as we have been told many times today, has failed miserably. Those who can afford it will go on paying higher prices for fuel, and the people who are again penalised are those at the margins of society who either cannot afford private transport or have to pay high costs for public transport.

Our public transport has suffered from underinvestment and does not meet the needs of the travelling public. In the North the problems are compounded because of the land border, and there is no easy solution other than to pay an oil rebate, as has already been mentioned. That, however, will not stop the huge number of private cars that fill up on the other side of the border on a daily basis, and it most certainly will offer no comfort to the filling stations in the North which are still open and struggling to survive.

There has to be an end to the see-saw of differentials in duty that has occurred over the years, sometimes in favour of the North and sometimes in favour of the South. The only way to do that is to harmonise taxes on both sides of the border. To do otherwise is to create a paradise for smugglers who, by the way, do not have to be terrorists plotting to overthrow the Government.

Mr Kennedy:

Does the Member accept that it is not harmonisation on this island that is required but, as he outlined in his earlier remarks, harmonisation of fuel prices throughout Europe?

Mr Dallat:

Absolutely. Indeed, Mr Kennedy has pre-empted something I will say later.

Much of the diesel on offer is not smuggled but is "manufactured" in the North using mixtures which I should perhaps not advertise. In other cases it is laundered with the aid of chemicals. Either way it eventually leads to expensive repairs for the unsuspecting motorists who buy it.

Now I come to Mr Kennedy's well-made point. The only long-term solution is for taxes to be harmonised throughout Europe, but, in the short term, if Britain has any interest in aiding the economic recovery of the North, then its Government should act as a Government should and address the issues while we still have an economic infrastructure. This Assembly in its fledgling days deserves the full support of the British Government to deliver, and, at present, they are not giving that support. Tax on oil is one issue, but we must remember that it is only part of the solution. The cost of road tax is also a serious issue. It is often the difference between viability and bankruptcy.

1.45 pm

As Eddie McGrady suggested at the beginning, this case must go to Europe. The Assembly must act - not next week or next month but today - to demonstrate that it has a useful function and is not simply a rubber stamp for implementing British policy, irrespective of the consequences. A series of suggestions has been made before the House. Let us include the European dimension, for it is here, I believe, that we will find not only a sympathetic ear, but a possible complete, or at least, partial solution to a very serious problem.

Mr Berry:

The motion draws attention to three issues - taxation, competition, and smuggling. They have all been well covered already.

I shall deal first with taxation. We are not discussing a fuel crisis today, but a tax crisis. It was the extravagant vehicle excise duty which drove hauliers to re-register more than 3,500 lorries in the Irish Republic. It is the excessive taxation on fuel which encourages thousands of motorists to buy it across the border. Its impact is seen right across my constituency where, as has been pointed out already, scores of filling stations have closed because taxation has made it uneconomic to sell their fuel legally.

Mr Hussey:

The point has already been made about the closure of filling stations, but it is exacerbated by the fact that for many of my constituents and, I am sure, for the Member's, their nearest petrol station is now across the border since so many have closed along it.

Mr Berry:

I entirely agree with the Member. Indeed, motorists from my own town of Tandragee, which is 20 miles from the border, cross it to buy their fuel.

The cost of fuel is well known, and the question has been covered very well today. When petrol arrives at the filling station, it costs a mere 16p a litre. When the customer buys that petrol, the cost has risen dramatically to 80p or more a litre. The 60p increase goes directly to the Chancellor of the Exchequer. Some 72% of the cost of fuel is accounted for by pure taxation. In other words, even if the petrol companies gave petrol away for free, it would still cost us at least 60p a litre, a situation which is neither just nor fair. The basic cost of fuel is the same in the United Kingdom as anywhere else. Excessive taxation makes the difference. The United Kingdom has the highest tax rate in the whole of Europe. The Republic of Ireland, Luxembourg, Spain, Greece and Portugal all charge a mere 55p at the pump. The price doubles because of tax. In France, Belgium, Germany and Italy, the price trebles after tax. Out on its own is the United Kingdom, where the price quadruples after tax. While the rest of Europe can buy fuel from 55p to 70p a litre, we must pay at least 80p to 85p a litre at the pump.

My second point concerns competition. Excessive taxation has had a negative impact on competition. It has allowed our competitors to begin with every advantage. The French haulier, for example, begins with a 17% advantage. When the Labour Government came to power in May 1997, the difference in fuel costs was 4p a litre. Today, that figure has soared to well over 20p. This hinders fair competition, and a civil Government is to blame. Instead of helping firms, it is driving them out of business in Northern Ireland. The excise rate in the Republic is about £1,200, while we in Northern Ireland pay about three times that figure - hardly a vote of encouragement for our hauliers or farmers. We must look at the tax on heavy goods vehicles. In the United Kingdom, it is £3,800, in the Irish Republic £1,200 and in Holland £750.

The last issue I wish to raise, which has been covered very well today, is that of smuggling. Recently four laundering plants have been closed down, but when one considers that each of those was capable of laundering 750,000 litres a year, one realises that the sums involved are vast. Who is losing out? Legal petrol stations are - and to such an extent that many are closing. The Exchequer is losing at least £40,000 per week. One customs officer recently stated that this has become a large-scale business. Reference was also made to organised criminal gangs which are exploiting the current situation. Smuggling has penalised law-abiding people and rewarded the racketeers. We are dealing with a problem that has reached epidemic proportions. The Northern Ireland Select Committee's report claimed that the Exchequer is losing out on at least £100 million per year.

In my constituency, and Mr Kennedy has already covered this, you can drive around the roads in south Armagh and see these lorries coming across the border. The police, the security forces and Customs and Excise have been working rigorously to track down these racketeers. It is difficult, but we do need more effort to try to track down these racketeers. They are mainly Republicans, especially in the area of south Armagh.

There is a clear focus to secure a reduction in fuel prices. If that is not done in Northern Ireland high fuel costs will equate to high haulage costs, resulting in high prices for consumer goods.

I support this motion and trust that action will be taken.

Mr McHugh:

A Cheann Comhairle, I also support the motion and agree with most of what has been said today.

I would like to welcome the farmers and hauliers who have come to the Assembly to highlight their situation. They are at the coalface, and they incur the costs directly on their income every day in a big way. I welcome their having this opportunity to make their protest heard.

This is about taxation more so than fuel. I speak mostly about rural areas. Rural dwellers do not have a choice in getting from one place to another, unlike city dwellers. They have some form of public transport - we have no public transport west of the Bann. Therefore people do not have a choice - they have to have their own transport. This affects the local economy with regard to inward investment. Investors look at those areas as being on the periphery and far away from ports. They consider that a detriment and decide that they are better off basing their industries elsewhere, disadvantaging people who live in the west in the matter of equality of job opportunities.

The agriculture industry, which has had massive hikes in its fuel prices - they have more than doubled in the last year - is feeling the pinch very severely. It is quite noticeable at farm level. People are trying to pay bills from hire companies and contractors. These have to be dealt with every year, whether they can afford it or not. There is great anger in the rural communities. The elderly are facing heating-fuel bills of double the price this winter but have been given a measly 75p increase on their pensions by Tony Blair, payable next April. This shows a lack of commitment to all rural areas by the British Government in terms of their wish to see those areas survive economically.

How much of the road tax that the hauliers pay goes back into roads? The Department of the Environment has a budget of £150,000 per year to repair the roads in Fermanagh. A company such as the Sean Quinn Group probably pays several times that amount in tax on its lorries. Of course, that is questionable now that so many have registered their lorries in the South, but the money is being paid and has been paid. They are not getting equal road quality for their vehicles and the amount of money that they are paying. That goes for motor car owners as well. There is a massive inequality. People have paid vast sums of money over the years and had nothing in return.

I agree with some of the environmental reasons for spending money on the environment and reducing emissions. However, speeding vehicles use a lot more fuel. Vehicles use one third more fuel above 60 mph. Most of the heavy vehicles these days are doing 70 mph-plus. There is something that people could do themselves to help, without incurring a cost.

Waste management is another problem which councils have to face in a bigger way than they have done so far. They are only touching the tip of the iceberg in their commitment to proper waste management that would make major savings in fuel. The free market is another thing that is lauded around the world, but it has a great cost in terms of waste and wasteful use of fuel. We are allowed to trade our goods from Brazil to Fermanagh. Beef is produced in Brazil and carted at great cost across the seas and across the roads to our shop shelves. The amount of fuel that is used to bring it here is a great cost. Is it really cheaper? Add up all the costs that are never counted when one compares the price here to the price somewhere else.

For every vehicle that goes down the road with goods in it, there is another one full of packaging and nothing else. That is another cost of the free market. I do not know what to do about it. Running two vehicles to deliver the same goods and bring them back again so that people can have massive choice is very costly in terms of global fuel costs. That is something people will have to look at in years to come.

I support the motion. There is to ing and fro ing about whether we should be speaking on an all-Ireland basis, or aiming our protests at the British Government. We in Ireland can enact a lot as a unified country, and make great savings in many ways at local and national level, no matter what the British Government do. The British Government have no particular interest in us in any part of Ireland. They work to their own agenda - "at home", as they call it - and they will never do anything to make life more sustainable for us here.

Mrs Carson:

Mr McCartney said that the field had been well and truly ploughed. I would like to harrow the field a little longer. I am concerned that the Labour Government's policy of indirect, or stealth, taxation is contributing to a ridiculous situation where we pay 48·8p duty on a litre of petrol. It seems a lot. A litre is the size of a carton of fruit juice.

That is bad enough, but the Government then proceed to charge VAT on this part of the fuel costs. The taxation system is biased against motorists in many ways, but this double taxation is iniquitous.

The Conservative Government were originally to blame for introducing tax on fuel at 5% above the inflation rate. They thought that this would be played out after a number of years. Then the Labour Government discovered that this was an easy way of lining their coffers. They went one better and added 6% above inflation. These increases have been subject to double taxation by applying VAT in addition. If this double taxation were stopped, 8p per litre could be knocked off the price of fuel immediately.

2.00 pm

I ask the Assembly to speak up for fuel consumers in farming, haulage and business, and I press the Westminster Government to address this issue in their November Budget review. I am deeply concerned about the plight of owners of filling stations. This has been mentioned in regard to border areas, but the problem has spread out from these areas as people increasingly realise that they can go across the border to fill up. The owners have seen their fuel sales drop because they have got dubious cheap fuels, and across the border fuel is cheaper again.

Our rural community comprises many facets, and the loss of locally based haulage to the Republic of Ireland is weakening our already precarious economy. I ask the Assembly to consider these issues in the wider context of maintaining our rural economy.

I have pleasure in supporting the motion.

Mr Byrne:

I support the general sentiments expressed by all Members who have spoken in the debate and congratulate Mr Beggs and Mr Dodds on bringing forward this motion. Several people, including myself, have been lobbying on this issue for two years. We have focused in particular on the damage that the disparity in excise duty is causing to petrol retailers in the border area.

In my constituency of West Tyrone a number of filling stations have closed over the last two years, including five in Omagh, four in Strabane and at least 10 others throughout the rural area. Petrol retailers feel totally exasperated. They feel that they have been acting as tax collectors on the cheap. Currently a petrol retailer receives a margin of 2p per litre. The oil company gets 16p per litre and the Government gets 60p to 65p per litre. Therefore the petrol retailer has a legitimate case when he feels that he is only a tax collector.

The sad reality is that, in the border zone from Derry to Newry and 25 miles inside the Northern side, people are exercising their choice. They travel to the South in private motor cars to fill up. Many haulage companies also do this. I know one company with a fleet of lorries which saves £2,000 per week in fuel bills by purchasing its diesel south of the border. People are making an economic choice and, legitimately, they are purchasing much cheaper fuel.

The issue of smuggling has been emphasised. This is a problem, and no doubt there is a smugglers' paradise for those who transport fuel deeper into Northern Ireland. This emphasises the gross disparity and the gross distortion to normal trade patterns which has greatly affected jobs in Northern Ireland. I cannot comprehend why the Treasury feels that it is marginal to sacrifice £200 million per year in loss of excise duty and VAT on fuel. Mr McGrady, Mr Gallagher and myself went over to meet a junior Treasury Minister last year. The Treasury officials seemed nonplussed that about £200 million on average was being lost. The reality is that in Northern Ireland this is not a marginal issue. It is a major issue which affects many filling stations and road haulage companies, as well as small manufacturing and distribution businesses that use their own vehicles for delivery.

Reference has been made to getting our neighbours in the Republic to increase their excise duties to make them in line with ours. I do not understand the economic logic of that, although there may be a political one. I have no doubt that now there is such a lobby in the Republic, there will be a further reduction in excise duties there over the next year. I think that the political pressure is such that the Government will reduce it. Consumers in Northern Ireland should not be the only ones to bear the burden and pain of high excise duties; our neighbours in the Republic should be asked to do likewise. The real issue here is that we need to get the Chancellor and the Treasury to recognise that the inelastic demand response to high excise duties for the last 26 years can no longer be tolerated.

In 1974, OPEC target oil prices quadrupled from $4 to $16 a barrel. In 1978, the target price increased to $28, and within the last 10 years the target price increased to $32. However, for the last 20 years the spot price of crude oil has averaged somewhere between $10 and $15 a barrel, which is not an exorbitant increase from the $4 a barrel in 1974.

In 1974 the average retail price of petrol and diesel was under 50p a gallon; it is currently almost £4 a gallon. It is not difficult to realise that it is not the oil companies that are ripping us off - unfortunately it is the Government.

I can understand the logic, in environmental terms, of having high excise duties and VAT on fuel if the revenue were being directed into public transport in order to provide an alternative mode of transport, but only 15 % of the total fuel tax revenue goes towards public transport. We have been fed an illusory argument for a long time.

In the meantime industry in Northern Ireland has suffered a major economic handicap. Because of our peripheral location it is virtually impossible for it to compete today while the high excise duties continue. I feel very sympathetic towards the road haulage companies. For many years Northern Ireland had a large road haulage industry, but it is shrinking, almost weekly, at the moment. We cannot compete.

I remember the time when Montgomery Transport Ltd, Woodside Haulage Ltd, Dukes Transport Ltd, Omagh Freight, Kelly Freight, Carna Transport Ltd and others had large fleets of lorries on the roads, but those fleets are getting smaller, because they cannot compete. As several Members said, many lorries are now being registered in the Republic, and that is disadvantaging our local regional economy.

I am extremely sorry for the legitimate road haulier or petrol retailer who feels unfairly treated as a result of Government policy. This Assembly does not have control over this issue; it is a reserved matter for Westminster.

I would like the Northern Ireland MPs to get together and make known the adverse impact high excise fuel duties are having on our industries.

Many parts of Northern Ireland are almost becoming an economic wasteland owing to this issue. The punt/pound differential is adding another 20% to 25% to our local industry costs. It is virtually impossible to compete when there is such a disparity in the exchange rate along the border zone. That begs the question of how long the situation can continue? Many in the manufacturing and retail sectors say it is impossible to see beyond the next six months. Action is needed urgently.

Earlier I referred to the five filling stations in Omagh and four in Strabane. They not only sold petrol and diesel, but they also had shops, and some of them sold tyres. That has all gone. I know family-owned businesses that want to remain in business, but which are being put in a terrible dilemma because of the product they are being offered for sale. The Assembly should not expect legitimate businesses such as these to suffer that dilemma any longer.

Mr Paisley Jnr:

I welcome the debate, and I support the motion. Indeed, the motion deserves the support of us all. The debate has been interesting. I listened with incredulity, along with every other Member, to Mr Birnie's gambit for Irish unity by suggesting that petrol prices should be inflated across the island. However, I do not know how that would be received in other parts of this island.

On the serious aspect of this debate, much energy and anger has been directed, rightly, at the Prime Minister and the Chancellor. They claimed that the protests will not make them change the level of fuel tax. They have treated those people who tried to indicate the level of public outrage and concern felt at the unjustifiably high level of duty on fuel with contempt. The Prime Minister said that it would be harmful to democracy and that he would not be bullied by the protestors.

Most people here believe that the Prime Minister has not been consistent on this issue of bullying. We have heard across this House that the Prime Minister is prepared to be bullied by other people in this Province - by the very people whose organisations are engaged in the illegal smuggling and trading of fuel. Yet he claims that he will not be bullied by the protestors.

The Prime Minister has called for proper and sensible debate. He says that there is a proper way to do things in the United Kingdom. Today, we are having a proper debate. We are telling the Prime Minister and the Chancellor that the rate of duty on fuel is excessive and it must come down. The reasons have been enunciated across the Floor - it is having a harmful impact on many industries, farmers, and ordinary householders who use fuel and who use petrol in their cars.

The Prime Minister asked for a proper debate, but is he listening? He asked for a debate on the issue and now one devolved region of the United Kingdom is having one. The Prime Minister should now respond positively to this debate. His failure to do so will only indicate that he is storing up more trouble ahead. I believe that a failure to respond will only force protestors back onto the streets in order to squeeze a response from him over the winter months.

2.15 pm

The inconvenience that we witnessed across the United Kingdom last week was minor compared to what it could have been if this protest had taken place in the heart of winter and in the very cold of the Outer Hebrides or parts of Northern Ireland. People would then have realised that Mr Tony Blair could be building up his very own winter of discontent. If he is not prepared to listen or to respond positively at this time, he is making further protests inevitable.

Members have rightly said that Northern Ireland is doubly disadvantaged because of the land border with the Republic of Ireland and the difference in duty there. Across the entire European Union, even where prices are more than 30% lower than in the United Kingdom, people are outraged that the price paid to Government for this vital fuel and resource is so high. Government policy on fuel tax is daylight robbery.

Look at some of the facts produced by the cross-party group that met in Northern Ireland last week. Fuel accounts for 35% of hauliers' operating costs. Fuel costs for farmers and fishermen have increased by 110% in the past 12 months. Derv prices are 83% higher in Northern Ireland than in the Republic of Ireland. That difference does not appear to be affected by the fact that the price of crude oil is the same in both countries. Official sales of fuel in Northern Ireland are down 42% in the last year.

It is not too strong to say that Government policy on this issue is daylight robbery. It is robbery that works against the robber. Across Northern Ireland, retailers tell me that there is a massive incentive to smuggle fuel because the price differential is so big. If the Government set a more modest level of duty, we would find that the risks and penalties associated with smuggling were not worth the while of the smuggler.

It is because of the price differential and the massive profits associated with this illegal trade that smuggling of petrol and, for that matter, cigarettes and tobacco is so common in Northern Ireland. The onus is on the Government to reduce excise duties so that it is not worthwhile for the smuggler to face those penalties because he cannot make the same profit and the same rich pickings that he is making now.

Across the United Kingdom the public do not feel guilty about purchasing smuggled fuel. We should face up to that. Most retailers will tell you that 73% of what is going into the car goes to the Government. Many people are of the view that the only person benefiting is a fat- cat Chancellor. It is not the ordinary retailer who is trying to make a living for himself and his family. There appears to be no tangible benefit to our roads from fuel tax.

There are those who argue that we will eventually see environmental improvements. The Road Haulage Association has produced statistics claiming that when a 40-tonne lorry delivers goods to a supermarket, it requires 500 cars to take that same amount of goods away. It goes on to say that whether we like it or not, even if rail freight grew by 300% over the next 10 years, more than 85% of goods would still have to be moved by road. Therefore, the environmental argument that this money will eventually see its way into better means of transport is complete and total nonsense.

The Government have a fundamental issue to deal with. Do they want to raise tax for its own sake or do these inflated tax demands have a purpose? Are the Government going to continue to insist on this high tax despite the fact that across the United Kingdom people are crying out against it? The European Union is mentioned in this motion. If the European Union means anything, then it could have bargained a deal with the oil-producing nations that would have resulted in lower fuel prices for all European citizens.

The failure of the Governments in the so-called partnership of Europe to bring about such a harmonised policy on fuel tax highlights the giant failure of the entire European experiment. It has failed its citizens on one of the most practical social and economic issues.

The United Kingdom Government must come up with a policy and a level of duty that ensures a vital resource is not priced at a luxury price but at a price that equates with its necessity.

Ms Morrice:

The Member says that the European Union has failed the citizens of Europe. Does he agree that there is not the same sort of problem in continental Europe as in the United Kingdom?

Mr Paisley Jnr:

I am amazed by that statement, considering the violent protests in France over the last few weeks and the outbreak in Belgium, where fuel duty is low at 19.2%. The whole of the European Parliament has been brought to a halt this very week.

The fuel duty which the United Kingdom Government and Governments across Europe impose on their citizens is unjustifiably high. It is unreasonable to ask people to pay that amount of duty. Wages do not inflate at the same rate. If the Government do not respond positively to the minimal protest that we have witnessed in the last few days, there will be a maximal protest that could cause widespread concern across the whole of Europe.

Mr J Kelly:

Go raibh maith agat, a LeasCheann Comhairle. I support the motion although, having listened to some UUP and DUP Members from across the Floor, I began to wonder if we were not rerunning the decommissioning argument because there was so much talk about paramilitarism and republicanism. It is worth remembering that to address the effect of the present crisis and not the cause is to devalue the crisis and to devalue the debate. We are talking about the iniquitous inequalities in fuel prices. So far as this part of the island is concerned, the only long-term way to address this problem, as with other problems, is to harmonise taxes across the island.

There is nothing new about smuggling, a Cheann Comhairle, and there is nothing new about poor men becoming rich through smuggling. Many of the poor men who became rich were not Republicans and did not belong to the Republican community. Since partition the border has generated an economy of its own, depending on whatever commodity was scarce. I remember when it was butter, then it was tea, then it was cattle and then it was pigs; other times it was alcohol. You cannot blame the effect without looking at the cause. It has been disappointing to listen to those who proposed the motion engaging in opportunistic party politics.

A Cheann Comhairle, we must address the fundamental issue that has bedevilled this island since partition. That is the lack of harmonisation of taxes and other tax-raising devices. Germany, France and Italy were able to harmonise and lessen the impact of the hardships caused by different prices, especially of fuel and related commodies.

It is also worth remembering, a Cheann Comhairle, that there is a global aspect to this. The British Government have, in their way, contributed to this crisis by acceding to OPEC demands to control the supply of crude oil. There is a global dimension as well as a local dimension.

To reiterate - and I am not just making a political point - it makes economic sense, if we co-exist on this island, to harmonise taxes if for whatever reasons we need that harmonisation.

Dr Birnie's suggestion that one solution might be for the Southern Government to raise their taxes to harmonise with ours is almost too ludicrous for words. I would have thought that the all-Ireland Ministerial Council would be looking at, as we have said, the harmonising of the tax regime in the two parts of the island.

It is a problem that causes anomalies in the Province. In Donegal there were protests when retailers there increased the cost of petrol and diesel at the pumps - prices were higher than in the rest of the island. People in Donegal, within the Province, had to protest against that iniquitous rise in their fuel prices - so it causes problems right across the board.

We have talked about the agriculture and road haulage sectors, but another sector which is seriously disadvantaged by this crisis comprises those who use home heating oil - particularly the elderly and the unemployed. On 27 September 1999, 900 litres of home heating oil cost £127; on 18 September 2000, 900 litres of oil cost £230 - a price rise of £103. That is an increase of more than 100%.

In our attempts to alleviate the problems of the haulage industry and the agriculture sector, we should also look seriously and urgently at the way in which ordinary domestic consumers using home heating oil are possibly trebly disadvantaged. They may have a car, or the husband might have a van that he uses for his business on which he is paying extra fuel tax. Then, just to keep themselves warm, they are paying over 100% more than they did last year. This is particularly relevant for the older members of our community. A Cheann Comhairle, I want to conclude by saying that I am not just making a political point, but the only solution, not only to the fuel crisis but to other crises that will arise in the future, is to have a harmonisation of tax and duty taxes throughout the island of Ireland.

Ms Morrice:

I also support the motion. I intend to be brief, and I do not think I need dwell on the well- rehearsed issues that have been raised, both in the Chamber and outside, by the hauliers and farmers who have come here today. Their plight has been documented on our television screens over the last few days, and everyone is aware of the issues. We are well aware of the precarious position of our farmers, our fishermen, our road hauliers, our petrol retailers in the border areas, and of those mentioned by Mr John Kelly a moment ago, domestic consumers, particularly the elderly, who have to depend on this source of fuel.

We support the call on the Chancellor to

"lessen the impact of high fuel costs on the economic well-being of Northern Ireland and its people".

We want to look at what the last few weeks have shown us about our complete and utter dependence on this type of fuel. The fact that a well-known high street shop in Belfast ran out of sandwiches because of the fuel crisis on the mainland is shocking when sandwiches could be made just round the corner. What sort of society is this that we depend so much on fuel in this way?

2.30 pm

Those taxes that are raised should be used for investment in alternative clean energy sources such as solar, wind and biomass et cetera to reduce our over- dependence on fossil fuels. Secondly, they should also be used to support strategies, initiatives and incentives to reduce CO2 emissions and encourage imaginative ideas such as car sharing and other ways of reducing the traffic on our roads. Finally, we desperately need investment in our public transport system, and particularly in the railways. Those are issues that the Government should look at.

Mr Speaker:

We will now interrupt the debate on fuel costs and return to it at 4.00 pm.

The debate stood suspended.

Mr Dodds:

On a point of order, Mr Speaker. Members have been informed, via the annunciator, that a statement expected from the First Minister and the Deputy First Minister on their visit to Washington has been cancelled. When are we likely to get this statement, and what reason has been given for the cancellation? Can you confirm that one of the reasons was that the First Minister and the Deputy First Minister could not heal their rift on policing?

Mr Speaker:

It is not infrequent for Ministers to explore the possibility of making a statement and then not make that statement, for all sorts of reasons - timetabling or whatever. Explanations are not normally given. My understanding is that the statement has not been cancelled. It is simply not being made today. It will be for the First Minister and the Deputy First Minister to decide whether to beg leave to make that statement at a later stage.


Oral Answers to Questions

Office of First Minister and Deputy First Minister

Programme for Government



Mr Byrne

asked the Office of the First Minister and the Deputy First Minister what progress has been made in the preparation and construction of an integrated programme for government.

(AQO 13/00)

The Deputy First Minister (Mr Mallon):

On 29 June, just one month after taking office again, we announced our agenda for Government, setting out early actions which would be taken across the range of the Executive's responsibilities in the remainder of this year. The Programme for Government will focus on the longer-term. During the summer, the Executive Committee had initial discussions about the broad nature, principles and structure of the Programme for Government. It also consulted Assembly Committees, social partners and other stakeholders in our public services on their views on the key priorities of this programme. The consultative exercises have been valuable in helping to inform the development of the draft programme. As part of the consultation process, a conference has been arranged for 2 October with social partners and a range of other stakeholders in key public services.

The Programme for Government is a completely new development in the administration of Northern Ireland. It will provide a clear understanding of what is expected from the Executive as a whole in terms of policies and programmes. The programme will take a Government- wide view and not be based on a series of departmental inputs. We will continue to work further on the programme in the coming weeks with the intention of submitting a draft of the associated Budget proposals to the Assembly in mid-October for consideration.

On Thursday, Ministers will be taking a half day away from the office to develop the programme further. It is our intention to provide a six-week period for the Assembly to scrutinise the programme.

Mr Byrne:

I welcome the Deputy First Minister's statement and thank him for its content. Does he agree that the people of Northern Ireland are eagerly awaiting the contents of the Programme for Government because they want to see this devolved Administration deliver real change and a better standard of living for all sections of the people?

Does the Minister accept that an integrated Programme for Government, incorporating an agreed approach among Departments, is essential, so that the people can feel the impact and experience the net benefits of better public services and job prospects? Finally, can the Minister outline how he envisages that the negotiation machinery will operate to collectively agree a Programme for Government given the political challenge that this poses when two Ministers are somewhat detached from the Executive?

The Deputy First Minister:

I thank the Member for his questions. I agree that the people of the North of Ireland, and indeed this Assembly, await the Programme for Government with considerable interest. It is crucial to have the collective view of the Executive as to where it will be going and the type of policy positions it will adopt. I believe that a wide range of policies can only have real impact if we think beyond departmental barriers, and if a number of Departments bring their resources to bear in a co-ordinated way. That is the only way to deal with many of the stubborn social and economic problems that we face.

The Programme for Government provides a major opportunity to address this type of issue and to signal how we will work together in the Executive.

In relation to the latter part of the question, the Programme for Government will be the collective will of the Executive, and a party which does not participate in Executive meetings can hardly expect to bring the same influence to bear on it as those which do.

Mr S Wilson:

The First Minister and the Deputy First Minister could not even agree on writing a statement on their visit to the White House last week - mainly because the Deputy First Minister once again made a fool of the First Minister on the issue of policing. Given that, can the Deputy First Minister tell the Assembly what chance there is of an agreed Programme for Government that will have to accommodate the policies of IRA/Sinn Féin? It is part of the Executive because of the weakness of the First Minister's party in admitting it in the first place.

The First Minister claims that DUP Ministers are sitting down with Sinn Féin in government to agree a Programme for Government. Would the Deputy First Minister confirm to the House that that is not the case?

The Deputy First Minister:

I can say very clearly to the Member - and I think that this is what is at the heart of his question - that the DUP Ministers are not pulling their weight collectively in the Executive. I can assure him of that. That is a tragedy. It is sad for the Executive and for the entire community. However, I have to say that the collective element within the Programme for Government is not something that anybody should take pride in staying outside of - because by staying outside one is actually staying outside the needs of all of the people of the North of Ireland. Rather than taking pleasure or expressing pride in the refusal to be part of the collective decision-making process and of sharing collective responsibility, people should be looking at their positions and asking themselves how best they, as a party and its Ministers, can contribute to the welfare of everyone in the North of Ireland.

Mr Leslie:

An integrated Programme for Government would be welcome, in view of the substantive debate which was taking place earlier today and which is to be continued. How does the Deputy First Minister intend to bring forward an integrated transport programme to address some of the concerns mentioned earlier, in the absence of the Minister responsible?

The Deputy First Minister:

I thank the Member for his question to which there are two obvious parts. We are all aware of the damage that has been done in relation to the question of fuel prices. We are unique in Northern Ireland - not only do we have the high burden of taxation, we also have the factors that derive from the border between North and South.

The second thing is in relation to the substantial elements of transport. It is crucial that we get this right and that we all agree in budgetary and policy terms how to deal with the problem. An example would be the issue of transport in terms of the British/Irish Council meeting. Have we seen the DUP Minister make any contribution to that? It will also be a matter for serious consideration at the next North/South Ministerial Council plenary session in Dublin. Will we have a DUP input there? No, of course we will not. This Executive, in its collectivity, will have to take on board those decisions that will be made about transport and other issues. It cannot be allowed to act to the detriment of people in the North of Ireland because of a political party's policy stance, rather than the political input by Ministers.

Weapons Decommissioning



Mr Dodds

asked the Office of the First Minister and the Deputy First Minister what reports they have received since the beginning of the summer recess on the decommissioning of illegal terrorist weaponry.

(AQO 30/00)

The First Minister (Mr Trimble):

The Independent International Commission on Decommissioning (IICD) was established by Her Majesty's Government and the Government of the Irish Republic to deal with and report on the decommissioning of terrorist weapons. The IICD has made a number of reports, including one on 11 February 2000. On 6 May 2000 the IRA gave a commitment to

"initiate a process that will completely and verifiably put IRA arms beyond use."

It also, in that statement, said that it would

"put in place within weeks a confidence-building measure to confirm that our weapons remain secure."

Following this, on 15 May 2000, the Secretary of State wrote

"the Government expect the IICD to make regular reports, whose contents must be for the IICD to determine. These will be published promptly by the two Governments."

On 25 June 2000, the IICD reported that it had been informed by President Ahtisaari and Mr Ramaphosa that they had successfully completed an inspection of several IRA weapons dumps. The IICD stated that the inspectors reported that they were shown

"a substantial quantity of IRA arms, including explosives, that the weapons are secure and cannot be used without their becoming aware that this has happened."

Mr Dodds:

It is interesting that all the dates quoted are prior to the summer recess, so the answer to the question I asked is zero, as far as reports are concerned. The First Minister could have been a bit more honest. Is it not a scandal for the First Minister to admit by implication - for he would not do so in his own words - that since the 22 May 2000 deadline for the completion of the decommissioning of illegal terrorist weaponry, there has not been a single report from the body set up to deal with the issue? When can we expect such a report? Will the First Minister accept that the IRA/Sinn Féin movement has no intention of decommissioning? In light of his manifesto commitment during the European election in relation to IRA/Sinn Féin that if there was no hand-in of guns there would be no hand-in-government for IRA/Sinn Féin, will he now apologise to the Assembly and to the people of Northern Ireland for so grossly deceiving them?

The First Minister:

The IICD did make a report after May, as I pointed out.

The Member who posed the question and supplementary should take account of the fact that some progress has occurred. The progress, as we know it, is not decommissioning in the full sense of the word. I would have thought that anyone who actually wanted to see decommissioning - and I am not at all persuaded that the Assembly Member who asked the question actually wants to see it - would welcome the progress made.


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