PARLIAMENTARY DEBATES - United Kingdom Parliament

651 Petrol Prices
15 MAY 2013
Petrol Prices
652
Mr Davey: I pay tribute to my hon. Friend for raising
the issue of businesses, in particular small and medium-sized
enterprises. If the allegations are proved to be correct,
and petrol and diesel prices have been higher than they
otherwise should have been in a fair market, then they
will have been hit as well. He will know from previous
debates on petrol and diesel prices the impact that fuel
prices have on the wider haulage industry. It is vital that
we get to the bottom of this not just for consumers, but
for our whole economy.
Mr Russell Brown (Dumfries and Galloway) (Lab): If
anything untoward is discovered at the end of this
process, it will not show the OFT in a good light. While
price is important, the quality of fuel that people purchase
is also an issue. I find that more and more of my
constituents complain about poor mileage from cheaper
fuel. I put to the Secretary of State a quick calculation:
2p a litre extra and two miles per gallon is far better
than cheaper fuel. I have asked Which? to conduct a
survey on fuel quality. Does the Secretary of State agree
that we should be looking at that too, and will he
support an investigation into the quality of the fuel that
people are purchasing at the pumps?
Mr Davey: That is an extremely interesting point. I
hope the hon. Gentleman is liaising with his local
trading standards department, in case there are any
serious problems, but I shall certainly ask my officials to
look into it. It is not just the quality of the fuel,
however, but fuel efficiency that matters: we need far
more fuel efficient cars and we need standards that send
a signal to the industry that we want it to make its cars
more fuel efficient. The Government have a proud
record of supporting the electric motor industry, and
the UK is beginning to be a real producer of electric
cars.
Chris Heaton-Harris (Daventry) (Con): Daventry
residents will be unsurprised by the Commission’s raids
on oil companies last night. In fact, they are fed up to
the back teeth with paying way more than other consumers
nearby. I was interested in what the Secretary of State
said about anti-competitive actions and how the OFT
might be looking at local markets in the future. Could it
not look for evidence simply by going to a price comparison
website, where straightaway it would be able to see
prices and demonstrate such behaviour historically?
Furthermore, does he recognise the concern about such
European Commission investigations, which can limp
on for decades?
Mr Davey: I hope that the hon. Gentleman supports
the fact that the European Commission is investigating
the market. It is important that it gets our full support.
On the OFT and its finding of possible problems in
local markets, I am sure that the OFT does exactly what
he says, but it might well need more information to
prove manipulation. Again, I call on hon. Members and
members of the public to provide such information, if
they have it, to the competition authorities.
Nia Griffith (Llanelli) (Lab): Last year, Labour called
for commodities such as oil to come under the Financial
Conduct Authority’s regulatory net, but Ministers refused
to act. Not only are people in rural areas hit by high fuel
prices, but many of them rely on oil for heating. What
assurances can the Secretary of State give them that he
will now strengthen the OFT and the FCA by giving
them the power to deal with commodity price rigging?
Mr Davey: We certainly are strengthening the competition
authorities in this country, as I explained earlier. We are
looking at a range of issues that have come to light as a
result of the LIBOR scandal, the allegations of gas
market manipulation and so on. As I explained to the
hon. Member for Edinburgh North and Leith (Mark
Lazarowicz), we are working not just nationally, but at
a European level and globally to ensure that these
commodity markets are fair and not being manipulated.
Our record on this stands in stark contrast to the
inaction of the last Government.
Guy Opperman (Hexham) (Con): People in the north-east
welcome the three-year fuel duty freeze, but we have
concerns that the OFT, despite having had repeated
evidence, particularly in rural Northumberland, of a
lack of competition, has still failed to act. Does the
Secretary of State agree that a way forward would be to
summon the OFT to the House so that all MPs can
make representations in his presence and get some
action from it? No one has any faith in the OFT.
Mr Davey: I am sorry to hear that my hon. Friend
does not have faith in the independent competition
authorities. According to the empirical evidence of how
they compare to other competition authorities around
the world, they actually score extremely highly. Nevertheless,
even though I saw those findings when I was competition
Minister, I wanted to strengthen them still further,
because there is no room for complacency. I hope he
realises that the Government will ensure that the
competition authorities have the powers they need.
Albert Owen (Ynys Môn) (Lab): My constituents are
now paying more for petrol and diesel at the pumps not
least thanks to the VAT increase of 2.5p on every litre
which the Secretary of State and his Government
introduced. He boasted in his statement that he was
going to give Ofgem extra powers and responsibilities.
In light of these allegations, will he seriously consider
giving the OFT similar powers and extending its remit,
so that we can prevent this from happening again in this
country, instead of relying on the European Commission?
Mr Davey: Some of the information and allegations
of market manipulation are cross-border, so it might
well turn out that these allegations required a European
competition authority. It is important that we have a
strong European competition regulator, and I hope the
hon. Gentleman would accept that, but of course we
keep under review the powers of the regulators and
competition authorities in general. The Government
have acted strongly to strengthen them.
Mark Durkan (Foyle) (SDLP): Businesses that we
have long known to be profiteers now stand suspected
of being racketeers. While the allegation of price
manipulation and derivatives distortion might take some
time to investigate, does the Secretary of State accept
that the wider question of commodity price indices
speculation needs to be addressed at the G8, particularly
in order to limit the degree to which financial institutions
can pass off such speculation as legitimate areas of
investment?