AN INDEPENDENT THOUGHT?

Petrol prices have risen again (locally from 129.9 to 133.9 per litre) but as most of us will have noticed by now when it comes to fuel (energy) prices they mostly tend to go up and stay up over the longer term regardless of occasional short-term drops in price. Despite the recession related blips general longer term trend for hydrocarbon prices in much of the world appears to remain steadily upwards.

Partially this is unavoidable due to increasing demands for more energy (particularly from energy hungry India and China), the growing planetary population and the short term nature of our planet’s hydro carbon fuel reserves. This trend is relatively easy to plot (even in the short term) and the medium and long-term consequences of being dependent upon energy resources that you don't actually control should be pretty self evident to even the dimmest Westminster politician.

That said it’s worth noting that there are basically two types of energy resources primary and secondary. Primary energy is energy that is largely supplied without being transformed e.g. crude oil, natural gas, and coal and secondary energy that requires a transformative (often energy intensive and sometimes polluting) process to refine it before it can be used to produce energy.

As of March 2012 around two thirds of UK primary energy demand was met from domestic production. Coal accounted was barely 4% of final energy consumption by fuel in 2010. Almost all UK oil and gas production came from the seas that surround the UK. Peak oil (for the UK) happened in 1999, and Peak gas production took place back in 2000. Since then the UK has moved from a position of relative self-sufficiency to one of dependency on imported oil and gas.

By 2009, imported gas was around 32% of the total gas used. 58% came from Norway, 25% from liquefied natural gas (LNG) from various different countries, 16% came from the Netherlands, and 2% came via the Belgian interconnector pipeline. The increased reliance on imported oil and gas left the UK far more open to supply risks associated with global supply constraints and price volatility. The UK Government periodically punted plans to reduce the need for oil and gas imports, by pushing primary energy production, and by developing low-carbon alternatives such as electric vehicles, biofuels and fuel efficiency.

The writing is not so much on the wall as on TV, as last Tuesday saw the first airing of a Gazprom advert on UK domestic television advert – they sponsor the European Champions League.  Russia has periodically put the squeeze on gas exports to the Ukraine, (currently some 80 per cent of Russian gas exports to the EU flow through the Ukraine) so the real dangers of relying on imported energy from unreliable sources have been clearly highlighted.

Russia (with full coffers) has ridden out most of the consequences of fluctuating oil prices and appears to have managed to avoid any real consequences of declining cash reserves despite its economy being heavily reliant on oil and gas exports. While some countries subsidise their fuel prices (just how sustainable that is over the medium to longer term is open to debate), in the UK this does not happen, so everybody wins, Government gets more tax revenue, the oil companies get more profit, and us the ordinary punters get consistently fleeced.

As for gas, some states have made efforts to protect themselves against external shocks to their energy needs; France was able to store 122 days of gas and Germany able to store 99 days worth (2009 figures). Here in the UK the almost entirely market driven approach turned out to be entirely inadequate, in the UK had a storage capacity which would have lasted for only 15 days (2009 figures). Some countries discuss the issue of energy independence at the highest level here in the UK such talk is best avoided.

New Labour took the best part of a decade to recognise the need to increase storage capacity and the UK has been playing catch up ever since. One consequence of this lack of storage capacity is that UK had to sell gas during the summer and purchase gas again when it is needed in the winter. The Conservative’s headlong dash to gas in the 1980’s was accompanied by a complete failure in strategic energy planning. The situation has been made worse by the current Government's decision to somewhat half-heartedly look at developing diverse reliable alternative energy sources whilst pursing yet another dash for gas.  

The last New Labour Government and the current Con Dem Government largely ignored repeated warnings that the lack of sustainable energy has set the UK on a path towards higher domestic energy prices and potential power blackouts. Over the next four to six years almost all of our old nuclear reactors, along with nine major coal and oil-fired power stations, will be run down and closed, with nothing ready to replace them.

We are now in the situation where we will become even more dependent upon imported gas from either unstable regions or dubious suppliers. The Con Dem’s solution to was to rush to go Nuclear and to effectively hand the Nuclear industry lock stock and barrel over to French energy companies who are busy paying off large loans to the French government. Anyway that was the plan, although the wheels seem to be coming of that particular wagon.

Now Cameron (and Westminster’s) focus is on Shale Oil/Gas as the great panacea for the UK’s energy problems – the problem is unlike primary energy sources the extraction and preparation of shale oil/gas is energy intense and certainly based on the Canadian experience exceptionally polluting. Even if Europe chooses not to chase Shale then developments elsewhere in the world could mean that as had been said elsewhere we can effectively kiss goodbye to curbing climate chance for ever and bequeath rising sea levels, wild weather and pollution to our descendants.

Even if the environmental and pollution issues could be addressed (and we don’t appear to be anywhere close to doing that at the moment ) there are other significant issues. For one, Shale oil/gas is a finite resource, there is just like oil, coal and gas, there is little chance of extracting 100% of reserves. What we may be talking about extracting something like 40 or 50% of it – which might last around 10 years – the big question is what happens then? While we use the brief window of Shale based energy are we going to develop secure energy supplies for the future or is this merely short term fix?

What successive Westminster Governments (since 1997) should have done was to  work with the devolved governments and the Irish Government to make these islands entirely self sufficient via renewable non market driven energy resources run by not for profit companies. They should have developed a flexible self-sufficient energy development strategy that encourages decentralised microgeneration. This could create jobs, useful skills and bootstrap the economy out of the recession as well as helping consumers by delivering community beneficial energy schemes – significantly successive Westminster governments have chosen not to do this.

Wales needs direction not Carwyn’s platitudes when it comes to the development of safe and secure energy resources. The renewable energy sector can play a key role in creating sustainable green energy jobs for local people, not damage the environment and provide our communities with a long-term viable economic energy future, that’s should be the real future dividend for our communities rather than the shareholders in the City or provide well paid jobs on the board for former Westminster politicians. 

THE JOYS OF WAITING TO GET STUNG!

Once again from one end of Wales to the other, in urban in rural communities we are bracing ourselves for yet another increase in petrol prices as fuel campaigners have warned us about the possible 4p per litre rise in petrol prices. The Petrol Retailers Association (PRA) has called for a “full review" of the wholesale fuel market. Motoring organisations and small business organisations have backed the call for a review and the Office of Fair Trading (OFT) is due to report on whether reductions in the price of crude oil are being passed on to drivers.

Over the last few months we have lived though a relative lull if not a slight drop in petrol prices. Ironically the relatively recent arctic weather resulted in a drop in the demand for fuel across northern Europe and oil refinery bosses began moaning about their glut of petrol capacity". Wholesale costs have however risen by 5p per litre in the four weeks since Christmas. Oil prices reached $147 a barrel before the recession in 2008, but dropped to around $100 a barrel (March 2011), the barrel price currently stands at around $113 (25th January 2013).

Plaid Cymru has long favoured the introduction of a fuel duty stabilizer mechanism to regulate tax on fuel in order to mitigate the effects of high prices at the pumps, and for a fuel duty regulator to cap the price of petrol at the pump when it rises too quickly. Wholesale oil prices will inevitably rise over the next few years as the world economy re-builds itself in the face of an increasing demand for oil and all of us will pay for higher fuel prices directly or indirectly.

Plaid Cymru MP Elfyn Llwyd said:

 "Since the beginning of the recession, fuel prices have been one of the main sources of rising inflation yet the Chancellor has failed to tackle this problem, instead choosing to introduce tax-cuts for the rich and slash payments for the elderly.

 “Speculation that prices are set to rise by 4p a litre during the coming days is extremely worrying, particularly given the soaring costs of other essentials such as food and utilities.

"I am particularly concerned for rural communities in constituencies such as my own that are bearing the brunt of Government inaction on this issue. They are forced to spend significantly more on fuel than those in urban areas, and figures from the Office for National Statistics also show that poorer families spend more on their income on petrol than richer families.

 "Plaid Cymru have been pushing for a genuine fuel duty stabiliser for the past decade. It is hugely disappointing to see that neither the Labour nor Conservative governments in London have agreed to this common sense idea. This must change without delay."

FEEDING OUR FUEL AND FOOD INSECURITIES

As UK householders brace themselves for increased energy bills, they are also going to take a hit from increased world food prices.  The UN's Food and Agricultural Organization (FAO)World food prices has revealed that world food prices rose 1.4% in September (in July food prices went up by 10%), driven up by higher meat, dairy and cereals prices. The rise follows two months of relative stability when food prices remained steady.

Here in the UK, we will end up paying higher prices for the food on the shelves. Elsewhere on the planet there are real concerns about possible food shortages as drought hit grain crops in the US Midwest, Brazil, Russia, Europe and central Asia. The UN has also forecast a decline in global cereal production this year.

The FAO is predicting that 2.286 billion tonnes of cereal are likely to be produced, this is slightly down from the 2.295 billion tonnes that had been estimated a month earlier. This forecast would mean a 2.6% fall in cereal production from 2011's yield, which was a record crop. This would result in a significant reduction in world cereal stocks by the end of 2013, yet there may be some light at the end of the tunnel as the early indicators for wheat crops in 2013 are said to be good.

The UN and the US Department of Agriculture says that  around one third of all food goes to waste and that consumers in rich countries waste almost as much food as the entire net food production of sub-Saharan Africa. To feed the worlds expanding population basically we will need to produce 70% more food by 2050 and this despite the fact that Global corn stocks (reserves) have basically halved since 1998.

More than 100 million more people across the world now suffer from hunger due to recent food price rises. Of all the humans on the planet, one in eight not have enough food. The situation is being made worse because we are turning food into fuel. The UN food agency (aback in August) called on the United States to suspend its production of biofuel ethanol.

US law requires that 40% of the US corn harvest be used to make biofuel, the UN says that this quota could contribute to a food crisis around the world. The harsh drought and heatwave across the US has made the situation worse by destroying much of the country's corn crop, and driving up prices. The US is not alone in relentlessly chasing biofuel, many countries are increasingly exploring the possibility of growing some of their fuel rather than importing it.

The FAO's Food Price Index rose 3 points to 216 in September, but this is still below the record 238 reached back in February 2011. Cereal prices rose 1% from August, wheat and rice offset a decline in maize. Meat prices were up 2.1%. Dairy prices rose 7%, the sharpest monthly increase since January 2011.

Sugar prices fell 4.2%, reflecting an improved sugarcane harvest in Brazil, the world's largest sugar exporter. Oil prices fell by 0.4% in September and the International Energy Agency is predicting a fall in oil and gas prices. This no doubt explains why the energy companies are going to charge us more for our energy over the winter – or perhaps not!

TIME FOR ACTION ON FUEL AND ENERGY

The Con Dem Westminster government (in its recent budget) has failed to deal with the problem of soaring fuel prices something that it hitting all of us, but, has added impact on families and businesses in our rural areas. Plaid has again called for a fair fuel regulator which would cut fuel duty when prices spike unexpectedly by freezing the price at the pump. This week's Finance Bill includes no provision for tackling the cost of fuel, which is one of the main drivers of rising inflation. The Bill faced its second reading on Monday. Plaid Cymru and the SNP tabled a motion of opposition on the basis that the Finance Bill fails to address a crucial issue which is damaging economic growth. Fuel aside, this Westminster Government, which once claimed that it was ‘the Greenest Government ever’, has promised much but has delivered little, failing to tackle our over reliance on fossil fuels for energy generation by developing renewable energy.

Plaid Cymru’s Elfyn Llwyd MP said:

"The issue of fuel prices really is the elephant in the room as far as the Budget is concerned.

"Fuel prices are one of the main sources of rising inflation yet the Chancellor has failed to tackle this problem, instead choosing to introduce tax-cuts for the rich and slash payments for the elderly.

"The Coalition has yet again shown itself to be completely out of touch with ordinary people and failed to act on an issue which affects the vast majority of the UK population.

"Rising fuel prices are a great problem for families and businesses in my constituency.

"It seems that they keep going up, whatever the government claims they have done - and so does the fuel duty that they collect.

"Motorists in rural areas spend significantly more on fuel than those in urban areas. Figures from the Office for national Statistics also show that poorer families spend more of their income on petrol than richer families, so there is an earning effect as well through soaring fuel prices.

"After 7 years of Plaid pushing for a genuine fuel duty stabiliser, it is hugely disappointing to see that neither the Labour nor Conservative governments in London have agreed to this common sense idea.

"Looking at the long term, I would also urge the Government to urgently address the lack of investment in renewable energy that we are seeing at present.

"We have to be moving away from our reliance on fossil fuels and moving towards a greener economy.

"Sadly, the Coalition's betrayal of its promise to be "the greenest Government ever" is making this extremely difficult.

"Plaid has consistently maintained that the future of energy generation lies with renewables and we will continue to campaign hard on this issue, regardless of the London parties' inaction."

TIME FOR A FUEL DUTY REGULATOR

Rapidly rising fuel prices have prompted calls for the introduction of a fuel regulator. While we are all getting hammered by high fuel prices, the situation is worse in the more rural areas of Wales. The introduction of a fuel regulator who would cut fuel duty when prices spike unexpectedly, freezing the price at the pump. George Osborne, in the Budget later this month should introduce a genuine fuel duty stabiliser, something that is supported by motoring organisations and the Federation for Small Business, this would cap the price of petrol at the pump if it increases beyond expectation.

The Chancellor should also look at extending the rural fuel duty derogation which is currently being trialled in parts of Scotland where 5p per litre is cut from the bill. Plaid (and the SNP) have long recognised this problem and have been pushing for it in Budgets in 2005 and 2008 with widespread support from real people outside parliament. New Labour ignored the problems of rising fuel prices, the Conservatives simply lifted the idea, watered it down and re-branded it as their own.

We are all suffering from the consequences of the massive hike in the cost of fuel recently, not all of it down to the rising cost of oil. The Tory-led Government's VAT increase and fuel duty hike last year merely pushed the price of a litre up. Businesses and especially families in rural areas, where a car is a necessity not a luxury are facing the pain because of these choices. For the short-term we need to have a fuel duty stabiliser and a special price for fuel in rural areas, but we also need to diversify and invest in renewable energy alternatives to reduce our reliance upon oil and other fossil fuels.

BIG MONEY?

I am old enough (just) to remember when petrol can in at £1 for 3 gallons, and a little later £1 a gallon, we are now paying around £6.02 per gallon (no wonder they changed things so that you buy by the litre rather than the gallon). I can recall adults at the time saying that if it got any more expensive they would cut back on driving or give up their cars (obviously that never happened).

Personally I reached my own private peak oil last June and am lucky enough to be able to use some subsidised public transport to get to and from work. The car is a luxury largely reserved for the weekend. Just for the record the UK average price for a litre of petrol is around: 133.89 and for diesel its around 142.21.

That 133.89 per litre breaks down along the lines of:

• 47 pence for the basic cost of the fuel
• 57.95 pence flat rate duty
• 22.32 pence VAT
• 1.5 pence for the bio-fuel element
• 1.12 pence for the supplier
• 4 pence for the retailer

Considering that motorists in these isles use around 37.6 billion litres per year you can see that is big money. Everybody wins - the Oil companies get rich, the Government gets a handy chunk of tax, the middlemen get their share - save for the motorist and the haulage firms who pay through the nose again and again. Wales is one of the parts of the UK that is least prepared for the consequences of fuel shortages and Peak Oil.

We have a transport and delivery network that is almost entirely dependent on petrol and diesel to get things done and to put things on the shelves. We have a high percentage of people who commute by car from where they live to where they work and many of them travel considerable distances. Our public transport system is inadequate, we need a combination of trams and trains to get people to work (and back again), we need to look at electrifying our local rail lines and ensuring that they are fully integrated into the transport system.

We face a future where cheap fuel will be a thing of the past, so we need to ensure that all our communities have reasonable access to a reliable cheap system of integrated public transport, at the heart of which needs to be our long neglected rail network. The old excuses about a lack of funding, despite the banking related financial crisis, are no longer acceptable;

We in Wales make up around 5% of the population of the UK, and make significant contributions to the exchequer - so we need 5% of the UK transport spend, and full control of our transport planning and our transport budget.If Westminster wants to make the Union work then cough up the cash!

A POVERTY OF IDEAS?

It's official, more than a fifth of all households in the UK were affected by fuel poverty in 2009, so says the Department of Energy and Climate Change (DECC). Repeated increase in fuel bills mean that the number of homes affected rose by one million, or 22%, to 5.5 million. The government defines fuel poverty as being when a household is has to spend more than 10% of its income keeping warm.

DECC noted that "between 2004 and 2009, energy prices increased: domestic electricity prices increased by over 75%, while gas prices increased by over 122% over the same period" and this led to the rise in fuel poverty. They (DECC) also predict that the numbers for 2010 and 2011 will have increased because of further rises in the price of energy.

Apparently the answer is more competition and the free market... Hmm...isn't that what we have all been living with (and paying for) over the last twenty plus years. An unregulated 'free market' or more accurately an largely unregulated privatised effective monopoly has clearly not worked. Surely to continue to repeat the mistakes of the past is a bad idea to say the least...or is HMG too busy thinking about windfall taxes on excessive profits...

FUEL PRICES DEBATE

Plaid and the SNP have a debate at Westminster (this afternoon) which will help to pressurise the UK government into taking action on rising fuel prices (which is hitting all of us either directly or indirectly). Plaid and the SNP are calling for the Con Dem Government to consider a regulator to cut fuel duty when oil prices rise. Both parties will make their case during an opposition debate in the Commons.

Speaking ahead of the debate, Plaid Cymru spokesperson for Transport, Jonathan Edwards MP, said:

“Plaid Cymru and the SNP recognised this problem long ago – we pushed for it in Budgets in 2005 and 2008 with widespread support from real people outside parliament. Unfortunately, Labour stubbornly ignored the problems of rising fuel prices while the Conservatives scared of supporting our idea decided to steal it, water it down and re-brand it as their own. There has been a massive hike in the cost of fuel recently, not all of it down to the rising cost of oil. The Tory-led Government's VAT increase and fuel duty hike have pushed the price of a litre up by at least 3.5p in the last month alone.Businesses and especially families in rural areas, especially in many parts of Wales, where a car is a necessity not a luxury are those who are facing the pain because of these choices. For the short-term we need to have a fuel duty stabiliser and a special price for fuel in rural areas, but we also need to diversify and invest in renewable energy alternatives to reduce our reliance upon oil and other fossil fuels.”

SNP Treasury spokesperson Stewart Hosie MP said:

"This may be the only opportunity MPs will have to debate fuel prices ahead of the Budget in March and the fuel duty increase in April, and so it is crucial that we persuade the Tory-led government to honour its pre-election pledge and establish a fuel duty regulator.The country is crying out for action to bring down fuel prices, and this SNP / Plaid debate will be a focus for that. Westminster's inaction has made this an enormous issue for the Scottish Parliament elections in May. Its a huge issue on the doorstep and the forecourts because and a key illustration of why we need to build up Scotland’s Parliament, and equip it with the full powers of financial responsibility. A Fuel Duty Regulator – which the Tories supported before the election – would bring duty down when oil prices go up. Cutting fuel by 10p per litre in Scotland would only cost about half of the estimated £1 billion in extra revenue the Treasury is set to rake in as a result of rising oil prices. It's a national scandal that in Europe's oil-richest country, Scots are paying among the highest fuel prices.”

Plaid Cymru / SNP motion:


This House notes the oil price has reached $100 a barrel; that diesel in the UK is the most expensive in Europe; further notes that the combination of the 1 January 2011 duty rise and the VAT increase is estimated to have added 3.5p to the cost of a litre of fuel; acknowledges the sharp rises in fuel prices over the past year and the resulting impact on headline inflation figures; recognises the financial pressure this places on hard pressed families and businesses already struggling with high inflation and the impact of the recent VAT rise; condemns the government's continued dithering over the implementation of a fuel duty regulator (or stabiliser) as neither a sustainable or stable way to make tax policy; further recognises the specific additional fuel costs for those living in remote and rural parts of the UK; is concerned that diesel in such places is approaching £7 per gallon; condemns the Government for its failure to prioritise the implementation of a fuel duty derogation; and calls for the introduction of a fuel duty derogation to the most remote areas at the earliest opportunity.

The Conservative Party had promised to look into a "fair fuel stabiliser" in their election manifesto, back in January, David Cameron was considering ways to help cash-strapped motorists. More recently, however,  Cameron has played down the possibility of a "fair fuel stabiliser" to limit fuel duty rises. The fact that UK Government benefits to the tune of 600 million a week in fuel duty may be a contributory factor in relation to the PM’s indecision, just as it was with former New Labour PM, Gordon Brown, perhaps Mr Cameron should declare an interest?

TIME TO DECLARE AN INTEREST?

Everybody is getting hit hard by the high fuel prices, if the Prime Minister breaks his promises on introducing a fuel duty stabiliser then the poorest in society suffering more than the rest of us. The Conservative Party promised to look into a "fair fuel stabiliser" in their election manifesto, in early January, David Cameron said he was considering ways to help cash-strapped motorists. More recently Cameron has played down the possibility of a "fair fuel stabiliser" to limit fuel duty rises. The fact that UK Government benefits to the tune of 600 million a week in fuel duty may be a contributory factor in relation to the PM’s indecision, just as it was with former New Labour PM, Gordon Brown, perhaps Mr Cameron should declare an interest?

There is an urgent need to see measures put in place to stabilise prices before they rocket even higher. Implementing a Fuel Duty Regulator would at least bring duty down when oil prices go up – and cap prices at the petrol pump. I think that there is little chance that Cameron will keep to his word or his election pledge on introducing a fuel duty stabiliser, as this UK Coalition Government seems to have shed any real principles as regularly as the snow melts in warmer weather.

The Federation of Small Businesses (FSB) says the UK now has the second highest diesel price in Europe - something which it says is causing great difficulties for hauliers and other businesses dependent on road transport. They point out that in Europe, the total price is split about 50/50 between the cost of the fuel itself and tax, yet, in the UK, the average product price is 38% of the total, with the remaining 62% coming from tax. Fuel duty already costs 58.95p for every litre. Average prices at the pump are now around 127p per litre and the Retail Motor Industry Federation has written to the Chancellor asking him to scrap the planned fuel duty increase, due in April.

Prices reached $147 a barrel before the recession in 2008 but are currently about $100 a barrel. The average price of petrol is rising at the highest rate for 10 years. The average cost of a litre of unleaded petrol has gone up by 6.13p since mid-December to a record 128.27p (£5.83 a gallon). The price of diesel is even higher and in some rural areas the cost of fuel is more than 20p a litre above the average figure. There are further increases in duty planned for April as well as expected rises in the price of oil. The 4th January VAT hike to 20% and a simultaneous rise in fuel duty, did little to help matters, as motorists saw 3.5p added to the cost of a litre.

Plaid Cymru has long favoured a new system of regulating tax on fuel in order to mitigate the effects of high prices at the pumps, and for a fuel duty regulator to cap the price of petrol at the pump when it rises too quickly. Wholesale oil prices will inevitably rise over the next few years as the world economy re-builds itself in the face of an increasing demand for oil and all of us will pay for higher fuel prices directly or indirectly. What's needed is an increase in sustained investment in renewable energy sources which would boost our economy without damaging the planet. It is scandalous that Wales was left out of recent pilot programmes for electric cars, but recent experience tells that for many Westminster Governments (Conservative or New Labour) Wales is so often out of sight and out of mind.

LAST EVENING'S HUSTINGS

The NFU Monmouthshire Hustings took place last night (at Alice Springs Golf Club, near Usk) and was well attended (which seems to be the pattern of Hustings of late). The questions covered a wide range of topics, some of which related to farming (and agriculture) including the economy, the banking crisis, supermarkets, party funding, fuel prices and micro- generation. 

Not surprisingly there was a focus on the future of farming (especially focusing on how the next generation of young farmers will get into the business. This is something that Elin Jones AM, Plaid Minister of Rural Affairs has began to address with the Young Entrants scheme. The farmers present were well aware of the Minister's ongoing activities on their behalf.

The slow but steady increase in fuel costs will have a harder impact in rural areas (where there is a lack of public transport) and also on food prices, where rising costs will hit both consumers and producers, with increased prices, falling profit margins and higher fuel bills - something that will hit both production and transportation costs. None of this is good news for either our farmers or us their customers.

One thing, we in Wales, cannot afford to neglect of the important agricultural sector, which still makes a significant contribution to our rural economy. And speaking of the farmers old traditional friends, it's worth remembering that not that long ago in the 1980's it was a Tory Secretary of State who literally sat by and quietly did nothing when many of our Dairy farmers got hammered into the ground by cuts in the milk quota.

Oddly enough when I mentioned this last night it was not picked up by the incumbent Tory MP who chose not to say a word on the subject. Whoever emerges from this Westminster election, in pole position (or on top of the pile) never again must any Welsh Minister fail to stand up and be counted and to fail to argue their corner on behalf of Welsh farmers.

We need to take practical steps to give Welsh farmers a fighting chance of making a real living; securing 80% of publicly procured food locally by 2015 is a realistic and practical aim. This is something that could provide the first practical step towards helping Welsh farmers and other producers make the most of the new opportunities that will arise from higher public purchasing of local products.

PLAID BUDGET RESPONSE 2010 (from Elfyn Llwyd MP)

"Last year I warned that the Welsh budget – the money that pays for our public services, our health, our education – was under threat because of cuts made at Westminster. The London parties said we were scare-mongering, but Wednesday’s UK Budget confirmed our worst fears.

The figures published yesterday showed a 5% real terms cut in the Welsh budget, hundreds of millions of pounds, not from some fantasy point in the future but in the 2010-11 financial year which starts in two weeks time. We will have £800m less to spend on Welsh public services in the next year than we should, and between now and 2014 we are likely to be much more than the £3bn worse off that we first thought a year ago.

This is neither fair funding nor a fair deal for Wales. Plaid Cymru were the only party to see this. We were the only ones who cared about our Welsh public services, about our council jobs, health and education, and the only ones facing up to the reality of the situation.

But we in Wales have no have say in these cuts. These are cuts imposed upon us by Labour and Tory masters in London, at Westminster. What’s worse is that Wales has been under-funded for many years and will continue to lose out in the future, as shown by the independent Holtham Commission, which estimates that Wales is losing at least £300m per year under the current system.

Under Labour, public spending in England and Scotland grew faster than in Wales. We in Wales have been taken for granted, and it is still only Plaid Cymru who are fighting for fairer funding, based around the needs of the people of Wales, the outcome recommended by the Holtham Commission.

Despite the successes of the One Wales Government such as ReAct and ProAct, hard working families and businesses all across Wales will still be feeling the pinch when new fuel duty rises kick in next week on what will inevitably go down as ‘April Fuels Day’.

By next January Labour will have increased fuel duty by a massive 17% since December 2008. This means that fuel duty will make up 59p in every litre when people go to the pump. It is a regressive tax that will hit families, businesses and public services budgets hard, and especially those in more rural areas who have less choice in how they travel or how far they have to go for the services they use.

When the time comes we will be fighting these tax rises and repeating our call for a fuel duty regulator which would cap prices at the pump. Labour introduced an even stealthier tax when they froze the income tax threshold. This will increase the amount of tax being paid by hard-working people and impact strongly upon low-paid families here in Wales. In contrast, Plaid would have increased this threshold by £1,000, taking thousands of people in Wales out of paying income tax altogether and putting more money in people’s pockets.

That’s why, in Plaid Cymru, we’re different. We put people first

We would also have increased the basic state pension for over-80s to the level of pension state guarantee to fight pensioner and fuel poverty, whilst increasing taxes on those who are very well off through bringing down the threshold for paying the 50% tax rate and levelling capital gains tax with income tax for example.

This can be afforded – by taking away tax breaks from the already well-off. They don’t need it… our pensioners and those on low incomes, do.

When times are tough it is a question of priorities – and only Plaid Cymru would put the people of Wales first, while Labour and the Tories are more worried by fat cat pin-striped City bankers who are back to their old tricks now after we risked billions of pounds of our money to bail them out.

Our economic future in Wales depends on there being a hung parliament, with neither Labour nor the Tories in overall control. It’s only when your votes matter that they start to pay attention to ordinary people. Plaid Cymru doesn’t owe anything to the City of London, only to the people of Wales – that’s why we’re different. Our policies reflect that and we go to Westminster to get the best deal for Wales, not to listen to anybody else."

MAKING THE CASE FOR A FUEL DUTY REGULATOR

There is a more than reasonable case for a fuel duty regulator who would cap the price of petrol at the pump when it rises too quickly. A rise in oil prices means an increase in petrol prices, which in turn leads, as petrol prices increase, to an increase in the amount the Government receive from VAT.

Under the fuel duty regulator plan, the Government will announce an expected yield from fuel duty and VAT in every Budget and PBR which will show the relationship between fuel duty and VAT. If there was a fuel regulator, then this would mean that if there was an unexpected spike in oil prices, fuel duty would be frozen while the increase in VAT caused by the price spike means that the Government would receive the predicted yield.

When there was a massive spike in prices in 2008, the Government found itself with an unexpected windfall while ordinary families were left struggling to survive.The purpose is not necessarily to prevent an increase in fuel duty but to smooth the shocks that come about from a volatile market. This protects poorer families and those living in rural areas who are more reliant upon cars, as well as any industry which requires petrol, e.g. haulage, taxis etc. It also impacts upon the public sector, such as police and ambulances.

The regulator as suggested only works in one direction. There is not an alternative if the market slows down. Over the longer term there is no future of fossil fuel based transport systems, Plaid favours the development of sustainable public transport which would enable people to reduce fossil fuel usage where possible, we believe in developing a sustainable green economy and more research and development to normalise more environmentally sustainable methods of transport than those which are oil-based (e.g. electric cars).

Now the idea of fuel regulator is not a new idea, Plaid and the SNP put down a motion (in 2008) on this very subject, which when it went to a vote on 2nd July 2008 resulted in a result of 308 to 14. Labour voted against, Conservatives and Liberal Democrats sat on their hand and abstained, while Plaid and the SNP voted for. Some two weeks later, on the 16th July 2008, the Tories put down a similar motion. That time Labour and the Liberal Democrats voted together against the motion, while Plaid voted in favour.

An Early Day Motion, was tabled this week by Plaid’s Adam Price MP and the SNP’s Stewart Hosie MP, reads:

That this House notes the recent unexpected spike in the price of petrol at the pump, recognises that unexpected increases in the price of fuel impacts significantly upon hard-working families, businesses of all sizes, seriously affects those living in rural areas who have no transport alternative except private cars, and impacts upon the costs of public services; recognises the need for greater research, development and support for reducing our dependency upon oil for everyday use, but in the short-term calls for a freeze on fuel duty in this Budget to protect those affected by the current price spike and further calls for a fuel duty regulator to prevent unexpected spikes in prices from affecting hard working families in future.

FARMING AND FUEL PRICES

The slow but steady increase in fuel costs will have an impact on food prices, it will hit both consumers and producers, with increased prices, falling profit margins and higher fuel bills - something that will hit both production and transportation costs. None of this is good news for either our farmers or us their customers.

Any economic failure across the farming sector will have a significant impact on dependent small businesses and suppliers across the whole rural economy, in the small towns and across the Welsh countryside itself. Most people agree that much more effort has to be made to market first class Welsh produce within Wales, within the UK and in Europe and beyond.

With an election coming, despite Gordon's daily dithering, you can bet on one sure thing, if not on the date of Polling day, and that the fact that, particularly in a rural constituency, everyone out chasing votes will appear like magic and claim to be the farmer’s friend. Our farming communities, despite this forthcoming wave of warmth continue to feel pretty isolated and marginalized, at least the contempt with which the farmers used to be treated by the once New Labour Government in Westminster and until relatively recently in Cardiff Bay (at least until the arrival of Plaid and Elin Jones, the Plaid driven One Wales Government Agriculture Minister) is now a thing of the past, at least in Cardiff.

We, in Wales, cannot afford to neglect of the important agricultural sector, which still makes a significant contribution to our rural economy. And speaking of the farmers old traditional friends, it's worth remembering that not that long ago in the 1980's it was a Tory Secretary of State who literally sat by and quietly did nothing when many of our Dairy farmers got hammered into the ground by cuts in the milk quota. Never again must any Welsh Minister fail to stand up and be counted and to fail to argue their corner on behalf of Welsh farmers.

Now, our farmers need a fair deal and a level playing field where they can make a real contribution. We need to take practical steps to give Welsh farmers a fighting chance of making a real living; securing 80% of publicly procured food locally by 2015 is a realistic and practical aim. This is something that could provide the first practical step towards helping Welsh farmers and other producers make the most of the new opportunities that will arise from higher public purchasing of local products.