Fuel discount bid for rural communities

A fuel discount scheme in the Scottish islands and the Isles of Scilly could be extended to 10 rural communities in mainland Scotland and England.

The UK has applied to the European Commission (EC) for a 5p a litre reduction in fuel duty in those places.

They are Acharacle, Achnasheen, Appin, Carrbridge, Dalwhinnie, Gairloch and Strathpeffer.

Kirkby-in-Furness in Cumbria, Hawes in North Yorkshire and Lynton in Devon are also included.

Chief Secretary to the Treasury Danny Alexander said that, as a Highlander, he knew "all too well that fuel prices tend to be highest in areas where a car is needed the most".

Seven of the towns for which application is being made are in Scotland.

"We've already delivered a tax cut for remote islands and now want to extend that to mainland rural areas that suffer from similarly high prices to the islands," he added.

"We have put together the strongest possible evidence base to try and maximise the places that get it."

'Unfairly penalised'

A decision from the EC is expected next year.

"As I've said before, it won't be easy to get this agreed with the commission, but I will do everything I can to make this happen," Mr Alexander said.

The 10 locations selected for the application have higher pump prices than in areas that already receive discount, are more than 100 miles by road from the nearest refinery and have a population density lower than 135 people per square km.

Pete Williams, RAC head of external affairs, said the application was "good news" because many people in rural communities were "unfairly penalised by high fuel prices as they rely on their cars for work and day-to-day life".

"It's also understandable that fuel retailers in these remote areas are selling petrol and diesel at higher prices due to increased distribution costs from being so far from refineries," he added.

"Let's hope the European Commission will see the sense in easing the pain for these rural towns when they come to make their decision next year."

'Total nonsense'

Labour Treasury spokeswoman Catherine McKinnell said she hoped the announcement would bring relief for drivers in the selected areas.

But she added: "Eight out of 10 of these areas have Liberal Democrat MPs - including two in Danny Alexander's own constituency. The public will want to be reassured this is no more than a coincidence because nobody will thank a Lib Dem Treasury minister who refuses to tackle the cost-of-living crisis everywhere but his own back yard."

Mr Alexander told BBC Breakfast it was "total nonsense" to suggest the plans were designed to favour seats held by his party.

The idea had been put forward by his party in its election manifesto, he said, but the locations had been chosen "according to a strict selection criteria".

He said it "would be nice to have a longer list" but the 10 communities chosen had a "reasonable chance of being agreed".

Introduced in March 2012, the discount currently applies to the Hebrides, Northern Isles, islands in the Clyde and the Isles of Scilly as well as other island communities in Europe.

Retailers register with HM Revenue and Customs to claim 5p a litre relief on fuel for sale to the public.