‘Islanders will feel less benefit of fuel duty freeze’

A decision by Chancellor George Osborne to cancel a proposed fuel duty increase has been welcomed in the isles.

Mr Osborne announced plans to shelve a proposed tax hike which was scheduled for a September introduction during his Budget speech in the House of Commons.

As a result, he said petrol would now be 13 pence a litre cheaper than it would have been had the rise been implemented.

That, he said, meant filling up a typical family car would cost up to £7 less than it would have done.

The announcement has been welcomed by owner of Tagon Stores and fuel retailer Scott Preston.

However he insisted motorists would see fewer advantages than their counterparts on the mainland.

Referring to the potential £7 saving he said: “Seven pound less to someone on the mainland, I’m sure. In Shetland that would turn out to be £3.

“Any cut in a proposed rise is a good thing. If they would only cut it a little bit more for remote communities it would have been fantastic. We just have to keep hoping that this trend in freezing duties could continue, and it would be even better if they would stop charging VAT on top of it.

“I genuinely think it’s a good thing, because if they had put it up it would have made it harder than it already is. He [Mr Osborne] is obviously taking into account the fact that people are not going to be happy if he puts it up, so it’s a sensible measure.

“How we move forward from that, and keep bringing prices down locally, who knows?”

Earlier this month Mr Preston called for a local protest group to be formed in the isles that would challenge high prices charged at the pumps. So far no-one has come forward willing to take up the fight.

Local MP Alistair Carmichael, who is a member of the coalition government, said the Chancellor’s announcement to cancel the planned fuel duty increase would be welcomed by islanders.

“The coalition has been supporting hard-pressed families by keeping fuel duty lower than it would have otherwise been if we had not abolished Labour’s fuel duty escalator.

“For islanders, we benefit from a five pence reduction in the level of duty paid locally. In addition we have now cancelled twelve pence worth of fuel duty escalator increases and cut the actual level of duty by one pence per litre.

“As a result, although pump prices remain dangerously high, fuel is now 18 pence per litre less due to the actions taken by the coalition. This, for an average car, is a difference of about £7 every time you fill your tank.”

Meanwhile, Mr Carmichael highlighted the Liberal Democrat’s influence on the budget, pointing to the increase in personal allowance as a major success for lower-income families.

It came after Mr Osborne announced changes which mean the amount of income which can be earned before it is taxed has increased from £6,475 in 2009, to £10,000 from 2014.

“In opposition, the Liberal Democrats argued for fairer income tax. In government, we have delivered it.

“Increasing personal allowance to £10,000 will give a tax cut to over 24 million people in the UK, and lift two million people out of income tax altogether.

“This policy will ensure that money is going to those who need it most – working people on low and middle incomes. I am delighted that it will come into effect one year earlier than originally proposed.”