The SNP today piled the pressure on Chancellor Alistair Darling over soaring fuel prices.

Faced with fuel protests in London, anger over rising domestic fuel prices and an economy under severe strain, the SNP today renewed its call for the Chancellor to use some of his oil tax windfall to cushion the blow of high fuel prices.

SNP MP Stewart Hosie accused Mr Darling of being "on the run" over fuel tax.

The Chancellor is also facing mounting pressure from within Labour, after former UK transport minister Stephen Ladyman called for a fuel price regulator to reduce fuel duty to compensate for rising VAT.

Dr Ladyman’s calls, made along with demands for a change in direction by the Labour leadership by nine other Labour backbenchers and former Ministers, echo SNP proposals due to be considered as part of the Finance Bill next month.

Mr Hosie said:

"Alistair Darling has all but admitted he will scrap his planned October fuel tax rise, but he should end any lingering uncertainty, and come clean now.

"The Chancellor is on the run over fuel tax, and now even the former Transport Minister is echoing the calls of the SNP and the Road Haulage Association for a fuel price regulator.

"Stephen Ladyman’s intervention is particularly timely with an SNP amendment for a fuel duty regulator to be considered as part of the Finance Bill in just a couple of weeks. It’s time for Labour MPs to put their votes where their mouth is.

"Alistair Darling must also explain what he plans to do with the extra £4 billion windfall he is getting from North Sea revenue from soaring oil prices. The case for a Scottish oil fund to power Scotland’s economy forward for generations to come is now overwhelming.

"Even the Chancellor’s colleague, Energy Minister Malcolm Wicks, believes that the idea of an oil fund is ‘attractive’.

"In the Budget, based on an oil price of $83.8 per barrel, Alistair Darling forecast that North Sea revenues would contribute 9.9 billion to the UK Exchequer in 2008/09. But the current oil price is over $130 per barrel for North Sea Brent crude.

"Based on average oil and gas prices in 2008/09 to date, North Sea revenues are set to be over 4 billion higher than the Treasury forecast.

"As an oil producing country Scotland should be enjoying the benefits of record oil prices rather than feeling the pain.

"With control of oil, Scotland would be third richest country in EU in wealth per head, but instead the UK Treasury is pocketing billions in extra revenues while households and businesses across Scotland are facing unacceptable price pressures.

"If the Scottish Parliament had responsibility for our oil and gas revenues we would certainly be acting to ease the burden and protect Scotland from the impact of soaring fuel prices."

Notes

1. In his policy paper, Dr Ladyman writes: "So let's start the process of striking our deal with the motoring public by scrapping the fuel duty escalator and replacing it with a duty moderator that recognises that when the price of fuel goes up the exchequer's VAT take increases and the rate of fuel duty can go down."

The ten Labour MPs demanding a change of direction are: Sally Keeble, Martin Linton, Stephen Ladyman, Fiona Mactaggart, Alan Whitehead, Anne Snelgrove, Eric Joyce, Shona McIsaac, Jamie Reed, Margaret Moran

2. "In the Norwegian sector of the oil field, where many of the crew had worked as well, the industry is organised somewhat differently . . . the tax revenues have been husbanded rather than spent by the government. Even Malcolm Wicks is a little envious: ‘If you could replay history, the idea as in Norway of building up a national [oil] fund is actually quite an attractive one.’"

The Guardian, 27 October 2007

Malcolm Wicks is Minister of State for Energy