"Pilot scheme on fairer fuel duty could be a reality within a year" - Thurso

12.03.00am BST (GMT +0100) Fri 16th Jul 2010

John Thurso MP for Caithness, Sutherland and Easter Ross, believes a pilot scheme to cut fuel duty in selected remote and rural areas could be set up within a year.

John Thurso, who is the Liberal Democrat member of the Treasury Select Committee took the opportunity of that Committee's meeting yesterday to question the Chancellor George Osbourne's commitment to the scheme.

Mr Osbourne pledged the Government's continued support for a pilot project to find out whether the scheme would be workable.

Other EU countries like France and Portugal have their own versions of a fairer fuel scheme for remote and rural areas but the previous Labour Government had consistently refused to investigate the viability of a scheme in Britain despite higher fuel prices.

The issue of investigating fairer fuel prices for rural areas is mentioned in both the Coalition Agreement and the Budget.

Notes:

What John Thurso said in the Committee (Members and witness have not yet had a chance to check and correct this version of the transcript):

Q222 John Thurso: I want to follow on from Andy Love's question regarding investment and growth, but can I first ask you a more parochial question. The Red Book on page 26 at paragraph 122 contains the welcome news that the Government are going to look at a fuel duty discount, which you may recall I have been pressing for nine years. My question is what confidence can I have that the same officials who had been advising the last government that was not possible for nine years will now advise you it is possible?

Mr Osborne: I think the confidence could perhaps stem from the fact that my Chief Secretary represents a seat, and I do not know whether it neighbours yours ---

Q223 John Thurso: Nearly.

Mr Osborne: --- which is a very large rural seat in Scotland and so also has his own particular interests in this direction to make sure that the work is properly carried through and there is a proper analysis of the options.

Q224 John Thurso: Can I urge that that happen quickly because with the VAT increase of 2.6p per litre, which will come through as a result of VAT and we are already paying a premium, this measure is about the only thing that can alleviate that.

Mr Osborne: We absolutely take this commitment seriously. It was mentioned in the coalition agreement and it is mentioned here in the Red Book. We will return, no doubt, to this Committee to explain our decision.