Treasury vows to explore fuel duty scheme for islands and remote areas

The Treasury has promised to look at how a scheme to reduce fuel duty in remote and island communities might work following a House of Commons debate instigated by Orkney and Shetland MP Alistair Carmichael.

Treasury minister Sarah McCarthy Fry approached Mr Carmichael after the 90-minute debate and told him she had instructed her officials to carry out a “proper examination” of how reduced rates of duty for island communities – as operated by other EU countries – could be made to work in practice.

Mr Carmichael said he hoped that it would be a thorough examination of such schemes and not just an official googling fuel duty and then finding a host of reasons why it would not work in the British context.

“Treasury ministers in the UK have always claimed that a reduced rate of fuel duty could not be made to work in the UK. This is the first time that they have ever been prepared to look at how other countries manage to do what they seem to find so difficult. We are far from getting what we need and want on this important issue but it is a significant and important piece of progress.”

The change in approach by the Treasury follows repeated refusals by government to look into why motorists in the isles and peripheral areas pay premiums of up to 20p on a litre of fuel.

In one bizarre instance in 2008, Treasury minister Angela Eagle said the government could not consider a fuel rebate for those living in island communities because of the possibility that motorists from elsewhere might drive to such areas to stock up on cheaper fuel.