(S3O-10865) Petrol Prices (Rural Areas)

12. Peter Peacock (Highlands and Islands) (Lab): To ask the Scottish Executive what representations it has made to the Chief Secretary to the Treasury regarding petrol prices in rural areas. (S3O-10865)

The Minister for Transport, Infrastructure and Climate Change (Stewart Stevenson):

The Cabinet Secretary for Finance and Sustainable Growth is writing to the Chancellor of the Exchequer to raise a number of issues, including rural fuel prices, which the Scottish Government wishes to see addressed in the UK emergency budget. I hope that the correspondence receives a more favourable response than our letters to the previous UK Government, which consistently rejected any attempt to address the high fuel prices in rural areas.

Peter Peacock: Does the minister share my belief that there is ambiguity in the UK coalition document on its commitment to a pilot discount scheme for petrol prices in rural areas? Has it made that commitment or is it simply going to investigate such a pilot scheme, as seems to be the case? There is, of course, a big difference between the two. If there is to be a pilot scheme, will he support my call for the Highlands and Islands to be a pilot area?

Stewart Stevenson: It is flattering to be expected to respond on behalf of the UK Government. In its manifesto, the Conservative party discussed a fair fuel stabiliser, under which fuel duty would be cut when oil prices rise and vice versa when they fall. In their manifesto, the Liberal Democrats set out that they would introduce a rural fuel discount scheme that would allow a reduced rate of fuel duty to be paid in remote and rural areas. In contacting and pressuring the new Government, we will hold the members of the coalition to account.

That said, the most recent letter from the previous Chancellor of the Exchequer of 9 April argued that a differential rate of fuel duty in rural areas would offer increased opportunities for fraud, false accounting and smuggling. It also argued that lower duty would increase retailers' margins, not retail prices. The enthusiasm for the measure on the member's party's benches seems to be not particularly marked.

Jamie Stone (Caithness, Sutherland and Easter Ross) (LD): Will the Scottish Government agree to instruct its enterprise officials to prepare a detailed analysis of how the very high price of motor fuel impacts on the cost of goods and vital services in the most remote areas of Scotland? The detail of such an analysis would reinforce the argument that action must be taken to address the very high cost of motor fuel in areas such as Caithness, Sutherland and Easter Ross.

Stewart Stevenson: Jamie Stone is absolutely right to focus on the need for objective information to underpin the argument. We will, of course, ensure that we have that information as we pursue this vital interest for many rural areas in Scotland with the new UK Government.