Chancellor concedes North fuel costs

12.00.00am BST (GMT +0100) Thu 5th Jun 2008

Responding to questions from local MP John Thurso during a hearing of the Treasury Select Committee, the Chancellor Alistair Darling admitted he understood the problems caused by high fuel costs in the North. He also agreed to consider suggestions from the MP for a scheme to lower fuel duty in remote areas.

Commenting John Thurso said: "I regard the Chancellor's comments as a significant concession. In the past the Treasury has always been in denial on this issue staunchly defending the status quo. I put it to the chancellor that the premium paid for fuel in the north was unfair which he accepted. He also agreed to consider the scheme I have been putting forward to use EU law to allow fuel rebates in remote areas. This is a considerable step forward from previous treasury intransigence."

The scheme would use the Scottish Neighbourhood Statistics classifications to identify remote areas. Filling stations in these areas would receive a fuel rebate to be passed on to customers so that fuel would be closer to the national average - currently 116.4p for petrol and 129.3p for diesel. The current premium over the national average is as much as 13p at remoter filling stations.

John Thurso added: "If such a scheme was implemented in Scotland it would cover over 50% of the landmass but only 3% of the population. It is a clearly targeted initiative that would give significant relief in areas of the Highlands, Islands, and Borders where there is little or no public transport alternative and I will continue to press the chancellor to convert his sympathy into action."