Investigation launched at long last into high prices in remote communities

An official review is to be carried out into the excessive prices paid for many goods and services – including fuel and delivery – in remote communities, it was announced today.

The Office of Fair Trading (OFT), which is charged by the government with ensuring that markets operate effectively in the interests of consumers, will take evidence from members of the public and one of seven workshops will be held in Shetland.

In a statement, the OFT said it recognised that prices were frequently much higher in remote communities with fewer suppliers and limited access to services.

“Fuel prices are a common cause for concern for those who need to travel long distances to get to school, to work or to the shops,” the OFT said. “Whilst shopping online may expand opportunities for broader choice and quality, deliveries to more isolated areas can sometimes be problematic or costly.”

Politicians have been calling for years for the OFT to investigate the operation of the market for fuel in particular. A derogation scheme is due in place next month to reduce fuel duty by 5p a litre.

Isles MP Alistair Carmichael said: “This is something for which I have been calling for years. The obvious market where we pay more than other communities is in road fuel and that has always been the primary focus for wanting an OFT investigation.   

“The fact is, however, that there are several other areas where it can be argued that markets have failed us such as the parcel post market where many companies outside the Royal Mail levy enormous extra charges on us. These areas too will be investigated.”

As part of the project, the OFT will be running workshops with residents in seven locations across England, Scotland, Wales and Northern Ireland. These include Devon, Northumberland, Shetland, Highland, Gwynedd, Bridgend and County Tyrone. 

The locations have been chosen to reflect the diverse nature of the UK’s remote communities and to include coastal, inland, island and mainland areas, and those with varied socio-demographic profiles.

The OFT will also look at evidence and experience from across the entire UK and will explore how other countries address specific market issues arising in isolated communities.

OFT director Kyla Brand said: “Geography and population density can have a major impact on the cost and accessibility of goods and services to consumers, and on how businesses operate. We want to get a clearer picture of these issues and understand and explain some of the reasons behind them. We also want to explore what the OFT, or other bodies could do to reduce the downsides, and maximise the benefits of remoteness.”

Mr Carmichael added: “This is an opportunity which we must seize with both hands. I shall be in touch with the OFT to establish what exactly they want to see by way of evidence. I also hope to work with the councils and the widest possible range of local community and business organisations in encouraging local people to take part in this investigation. It is up to us to make our case for ourselves. Nobody else is going to do it for us. If we do not use this opportunity now then it could be many years before we get another chance.

“The holding of an evidence session in Shetland is welcome. One of the first things I shall be exploring with the OFT is how we might make that session accessible to people in Orkney who also want a direct voice to be heard. At the very least I would like to see some element of video conferencing being used.”

Consumers and businesses wishing to contribute to the study are requested to send their views before 20th April to the OFT Office in Scotland, 23 Walker Street, Edinburgh EH3 7HX, fill in an online form available from www.oft.gov.uk/remcom or email remotecommunities@oft.gsi.gov.uk.

The OFT expects to publish the outcome of this call for evidence by July.