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Fuel Duty (Rural Areas)

Thank you, Sir Nicholas. I will be brief. I congratulate my hon. Friend the Member for Orkney and Shetland (Mr. Carmichael) on securing this important debate. It is a subject that hon. Members from the highlands and islands have returned to again and again over the years and to which we will continue to return until we find a Minister who listens to our legitimate concerns, such as those raised by the hon. Member for Ynys Môn (Albert Owen). I will begin by describing the experiences of people in my constituency. It is not an island constituency, but a large area in the mainland of the highlands. None the less, it is in a similar position to that described by my hon. Friend the Member for Orkney and Shetland. There is effectively a triple whammy that hits people in remote and rural areas: they have to travel longer distances; they face significantly higher fuel prices; and there are often little or no public transport alternatives. As has been said, for most people in such areas a car is a necessity, not a luxury. That could not have been demonstrated more clearly than by last month's cold spell, during which public transport was badly affected, and if people were able to get around at all, it was only by using their own vehicles. To those problems, I add the fact that incomes are significantly lower in the highlands and islands. The average income is about 85 per cent. of the Scottish average, which in turn is lower than the UK average. As well as spending a lot of money on petrol or diesel to fuel their cars, people in my constituency, by and large, spend much more money than people in the rest of the country on oil to heat their homes. That is yet another cost burden that benefits oil companies and oil distribution companies. People in my constituency, particularly those in the most rural and remote areas, are spending a greater proportion of their already lower incomes on running their cars and heating their homes. They therefore have a great deal less disposable income to spend on other things. Of course, many things could be done to relieve that burden. I will talk about the fuel derogation in a moment, but first I suggest that investment in public transport could make a difference. Like many of my colleagues, I am deeply disappointed by the lack of progress that the Edinburgh Scottish National party Government have made on investment in public transport, particularly in the railways. It is deeply disappointing that no SNP Members are here to take part in the debate, when they claim to represent the whole of Scotland. This is an Edinburgh SNP Government, not a highlands and islands Government. There are actions that can be taken. I was involved for many years in campaigning to persuade the Tesco store in Inverness to reduce its petrol prices to the level at the store down the road in Elgin, and we were finally successful only after we had held a meeting with the chief executive himself. However, the Government have by far the greatest power to address the issue, and the Minister should look at experience in other European countries. The European energy products directive allows a derogation to provide for a reduced rate of fuel duty in specific areas. Greece, France and Portugal have taken advantage of the derogation, and I see no legal or practical barrier preventing the UK Government from doing the same. The only barrier is the lack of political will, which, as my hon. Friend the Member for Orkney and Shetland said, stems from a complete lack of understanding of the way in which people are suffering. My hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) has proposed an entirely workable scheme, and I proposed a similar scheme a couple of years ago, although it was not entirely the same. A scheme could therefore operate in a variety of ways, and all the Treasury's objections have been answered by our proposals and by the way in which schemes have operated in the other European countries I mentioned. Like my hon. Friends, I would support a pilot in island communities, which would demonstrate that a scheme was workable. The pilot could easily be extended to remote and rural parts of the mainland—anything to get the door ajar. I can see no practical objection from the Government's point of view to a pilot in island areas. I spent the first few years of my life on the island of Colonsay, in the constituency of my hon. Friend the Member for Argyll and Bute (Mr. Reid), and such a community, or a similar community on Orkney and Shetland, would be an ideal place to demonstrate a scheme's workability and social and economic benefits. In the context of the recession, from which we are potentially only just starting to emerge, our proposals would also provide an economic stimulus to the islands and the remote and rural areas in which they were implemented, and I hope that the Treasury will consider them for that reason as well. Overall, the cost to the Treasury would be small, but the benefit to the communities affected would be enormous, as those of us who represent them know. This issue is a critical test of the Government's commitment to fairness. Applying a reduced rate of fuel duty, which is allowed by European law, to remote and rural parts of the country would demonstrate that the Government understand the importance of treating all parts of the United Kingdom fairly. This is, or is supposed to be, a British Government, and they should understand and be sensitive to the needs, demands and economic interests of all parts of the country, including the highlands and islands. I therefore hope—almost against hope, on the basis of previous experience—that the Minister will show more sensitivity and understanding and more of a willingness to grapple with these problems than any of her predecessors.