Islanders to get 5p discount on fuel

ISLANDERS will be given a 5p fuel discount from the beginning of next March, it was confirmed yesterday.

The date was set after ministers got final clearance from the EU to operate a rural fuel rebate pilot scheme off the coast of Scotland and in the Isles of Scilly.

Chief Treasury Secretary Danny Alexander said: “This is terrific news for island communities, which have long suffered the effects of high fuel costs. From 1 March next year, islanders will see a 5p cut in the pump price of petrol and diesel.

“As well as securing EU clearance, we have produced a scheme designed to protect the cashflow of local retailers.

“We have also delivered on a promise to help address the persistent unfairness of some of the lowest income communities in the country paying among the highest pump prices.

“After years of people saying this could not be done, the government has delivered it in less than two. This is another example of our determination to govern for the benefit of the whole United Kingdom.”

Fuel retailers will be required to pass on the full saving of the rebate on petrol and diesel to customers, the government said.

Retailers will be able to claim the rebate from HM Revenue and Customs on fuel purchased from 1 January so they do not suffer cashflow problems in passing on the discount in March.

The scheme will cover the Inner and Outer Hebrides, islands in the Clyde, the Northern Isles and Scilly. SNP Western Isles MP Angus MacNeil said: “I welcome that we have a victory and a start date for this scheme. I have been arguing for this scheme for the past five years.

“The previous Labour government did nothing to help and while I am pleased that this coalition government have moved, had they been nimbler the scheme could have been in place by now.

“The price of fuel has been rising steadily for the past two years, with it now at record levels, and the gulf in price between the Hebrides and the mainland being nearly 18p a litre. This will go some way to helping motorists.”

Highland and Islands Labour MSP Rhoda Grant said it was welcome news for island communities, but “does nothing to help those living in remote rural mainland areas where fuel prices are just as high”.

She said reversing the proposed VAT increase on fuel would help people in all rural communities.

Draft legislation for the pilot scheme will be published on the HMRC website.

Skye Liberal Democrat MP Charles Kennedy also welcomed the pilot scheme. He said: “It has been a long haul since Jim Wallace and myself, based on a Brussels visit to see European officials about variable fuel rates way back in the Eighties, began trying to persuade successive UK Governments to adopt such an approach.”