The party termed the recent SIC budget meeting ” a farce”, comparing the proposals to that imposed to public services nationally by the coalition government.

Spokesman Gordon Thomson said Labour’s message in the aftermath of the 2010 election was that a rash of cuts to public services too fast and too deep could tip the country’s economy back towards recession. While that has fortunately thus far been avoided, the economy was floundering, with the government seemingly running low on ideas on how to provide stimulation.

He said: “A similar scenario could potentially face Shetland in the near future. The farce of the recent council budget meeting underlined the dangers that Shetland could face if the majority of the proposals are put into action.

“The ad hoc, ill-thought out manner of addressing serious issues to various communities highlighted the real lack of political leadership within the SIC that truly was a meeting of the dying embers of the administration.”

Recent party meetings had highlighted concerns over the lack of analysis and research conducted by the SIC on the potential impacts of cuts on the community, Mr Thomson said. That the key proposals focused on children and the elderly, the most vulnerable in society, was a very grave concern of the party.

He added: “The parallels between the Westminster government and the SIC are there for all to see. A raft of unpopular cuts at the wrong time, affecting the wrong services could damage the Shetland economy to a dangerous level.

“The Shetland Constituency Labour Party acknowledges that difficult decisions are necessary but urges the new administration to thoroughly assess the situation and re-visit proposals put forward by the current councillors. Not enough time has been dedicated to understanding the current climate and the party will be eager to engage with new councillors on their position and what it means for Shetland.”

OSCR cautioned the trust that any “inappropriate” practices or actions relating to councillor-trustees’ dual roles could prompt intervention, perhaps to restrict the trust’s ability to spend or receive income or to suspend any trustee or trust employee.

The unprecedented action, which will damage the trust’s reputation, is in reaction to its tortoise-speed approach to ending councillors’ stranglehold over the charity which has up to 22 councillors and only two appointed independents.

OSCR has already invoked its considerable powers to demand advance notice of all future trust meetings, copies of agendas and reports, draft and final minutes of every session, plus an explanation of how councillors deal with each potential conflict of interest as it emerges. A warning has been added that a team from OSCR may turn up at any future trust meeting.

Trustees are due to discuss the unprecedented threat to their freedoms at a meeting on Wednesday.

Their specialist lawyers Turcan Connell have advised them of the seriousness of the threat of action from OSCR if they are perceived to be in breach of statutory rules on conflicts of interest. Simon Mackintosh of Turcan Connell warned that the practical effect of OSCR’s monitoring regime “should not be underestimated”.

“The action which OSCR could take includes (in the case of misconduct) suspending a trustee or senior manager responsible for, or privy to, the misconduct or who has contributed to, or facilitated it, or who appears to be unable to, or unfit to, perform their functions in relation to the charity.”

OSCR’s heightened scrutiny follows February’s decision by the trustees to reject their own constitution reform proposals, which had taken a year to formulate. They agreed to put the matter off until after the next council elections in 2012, although it was agreed talks could continue in the meantime. The tactic effectively stuck two fingers up to OSCR and people in Shetland who have been calling for reform. The inaction was approved by the trust despite warnings from some trustees about the possible consequences.

The proposal they rejected was to replace the current format with 15 trustees made up of eight councillors and seven people selected from the community.

In a private meeting with trustees in June, OSCR made it clear that delaying change for two years was unacceptable. In the absence of progress it said there remained “a real risk both of systemic and specific conflict” which would impact on the trust’s ability to perform effectively and appropriately.

OSCR highlighted the need to address the problem of how the trust is perceived by others when making its decisions. In a letter to trust chairman Bill Manson in July the regulator said: “It is not solely about the way in which a decision is arrived at, but also about how the decision-making process and practice appears to others outwith the trustee body.”

OSCR’s head of inquiry and investigation Laura Anderson again implored the trust to “move forward to adopt different, less high-risk and more appropriate governance arrangements”.

Meanwhile, two anonymous complaints to OSCR from people in Shetland relating to the trust’s discussion of Viking Energy affairs in 2008 and 2009 have been rejected by the watchdog, partly because at the time it did not have proper procedures in place for taking action.

In one case the complaint about trustees deciding to invest in Viking was deemed inappropriate for OSCR to get involved with. “It appears to OSCR that the decision … was within the trust’s powers. OSCR does not have the discretion to overrule a charity’s decision, validly taken within its powers, on the grounds that others take a different view, however strongly held.”

The other complaint was similarly put to bed without recourse to action because “there does not appear to be sufficient evidence that the charity trustees who are also councillors acted in a way that resulted in the interests of the trust not being represented”.

That is the view of John Scott, one of the trust’s two non-councillor trustees, who is trying to reignite the debate about how to implement reform in the wake of renewed criticism of the relationship between the council and the £200 million community fund.

Mr Scott, who sits on the trust by virtue of his role as Shetland’s lord lieutenant, this week circulated an outline proposal and wants it – along with any other contributions – to be discussed at the trust’s next meeting on Wednesday 8th September with a view to reforms being in place to allow the election of new trustees by the end of March 2011.

In February this year trustees appeared to have kicked any kind of reform into touch until after the next set of council elections in May 2012, backing SIC convener Sandy Cluness’ move to block changes by a 12-3 margin, with six abstentions. But that was an act taken in defiance of charities regulator OSCR, which has repeatedly asked the charitable trust to come up with proposals to distance itself from the council.

Last week’s Accounts Commission report said the council’s approach to its relationship with the trust was “inconsistent” and “contra­dictory”. Mr Scott argues that criticism from the commission, OSCR and others makes it “no longer tenable – or desirable – for the council to continue to ‘control’ the charitable trust”.

Currently 21 of the 22 SIC councillors sit as trustees, the exception being Allan Wishart who stepped down to take up his role as co-ordinator of the Viking Energy windfarm project last year.

Mr Scott wants to see 10 trustees elected by the Shetland public, three trustees appointed by the council and two “co-opted” trustees who would be elected for renewable one-year terms.

Mr Scott will stand down from his position as lord lieutenant next year after he turns 75. As well as removing the lord lieutenant’s right to take a seat on the trust, he wants to spell an end to the seemingly arbitrary situation whereby the head teacher of Anderson High School, currently Valerie Nicolson, is also involved. Head teachers have traditionally taken little or no part in political debates at trust meetings.

Mr Scott told The Shetland Times: “It is vital that the trust has responsible trustees and I think that the proposal, based on the recent review of governance of the National Trust for Scotland, will deliver a good method of selecting able members of the public to be elected as trustees.

“I believe that the change will remove the difficulties that councillors have found with conflicts of interest between the council and the charitable trust leading to some perceived abuses. The other plus will be the clear divi­sion of accounts of the two bodies by the end of this financial year.”

Anti-Viking Energy campaigners have been pressing for reform on the grounds that councillors face an irreconcilable conflict of interest over the project in their roles as trustees and elected members. The trust inherited a 45 per cent share in the highly controversial project from the council almost three years ago.

Councillors were warned by SIC monitoring officer Jan Riise last summer that they could not objectively debate and decide on the windfarm as a planning authority and would risk being in breach of the councillors’ code of conduct if they did so. But members chose to “note” rather than accept the advice.

Mr Scott is suggesting that an interim committee made up of chairman Bill Manson, two councillors, the two non-councillor trust­ees and general manager Ann Black would manage the transition towards the proposed new arrangements. They would produce a matrix “matching the skills sought from candidates against the duties they will fulfil”, from which a “sifting process” would begin.

He said the proposal was intended to spark debate and represented only one possible way forward. Under his idea, once potential candi­dates had taken part in the sifting process – designed to assuage OSCR’s concerns over whether directly-elected trustees would have the right skills mix – even if they did not gain approval they would still be entitled to stand for election.

The ballot would be conducted exclusively through postal and electronic votes and no SIC councillor would be eligible to stand. Each voter would have 10 votes, one for each elected trustee. Once elected, no individual would be allowed to remain involved in governing the trust for longer than eight years.

Earlier this year Mr Cluness, who has always been resolutely opposed to diluting council control over the trust, persuaded members to scrap the proposal before them. That was to create a 15-strong trust made up of eight councillors and seven independent trustees, who would have been appointed rather than elected. Previously Mr Cluness had vowed to pursue the matter to the highest court in the land if necessary.

A separate attempt by councillor Jonathan Wills to have a 15-strong trust consisting of eight independently-elected trustees and only seven councillor-trustees was also rejected by nine votes to three, with nine abstentions.

The trust reform working group – made up of Mr Manson, Mr Scott, Mrs Nicolson and councillors Frank Robertson, Florence Grains, Jim Henry and Josie Simpson – was then expected to consider, at a leisurely pace between now and 2012, how best to modernise and distance the trust from the council.

The charitable trust invests £10 million in the local community every year, from income it makes by investing the community’s oil funds on the stock market. That sum chiefly goes on funding the amenity, arts and recreational trusts and care centres. It also funds a range of smaller organisations, schemes and grants.

The payment, which will be made today, is intended to cover the cost of schools’ usage of the isles’ swimming pools and leisure centres for this year.

The council had previously reneged on a deal to pay for educational use of the facilities, and earlier this year SRT had been forced to watch as the bill was passed instead to Shetland Charitable Trust, where coun­cillor-trustees, after consultation with the charities regulator OSCR, again refused to pay out.

Finally, at the end of June an agreement was made with the SIC to make the one-off payment. A big question mark still remains, however, over funding for the coming year.

At a meeting of the recreational trust this week, general manager James Johnston told trustees: “The last 12 months have been a difficult time, but we’ve still managed to provide a good service.”

But, he warned, if agreement could not be made on a payment for next year, “we’re going to have a huge hole in the budget”. Four hundred thousand pounds, Mr Johnston explained, was the cost of running two rural leisure centres for a year.

“We could ask the council which two centres they’d like to close,” suggested trustee and former councillor Billy Stove, clearly frustrated by the SIC’s heel-dragging.

SRT’s budgeting process for next year begins in September, so the trust is crossing its fingers that the funding issue can soon be resolved. Mr Johnston has been in discussions over past months with schools across the isles, to assess the varying levels of facility usage.

Trustees at the meeting were adamant that schools should continue to make the best use of the centres, but that reduced provision was, unfortunately, a possible outcome of the current situation.

But if school use was to be reduced, SRT would then be faced with “a dilemma”.

Mr Johnston asked: “Can we keep the facilities open during the day when there’s no public use and if the school’s not going to use it?

“The issue of charging schools isn’t to make money. It’s about charging for the services they use.

“Would we allow our customers to use the services without paying? That’s effectively what the council has been doing.”

“We need the money. We’re not just asking for it for the way of it,” chairman, Joe Irvine added.

“If in six months or a year’s time this has not been resolved . . .” Billy Stove began.

“. . . We’ll be bankrupt.” Mr Irvine interrupted.

Mr Johnston explained that the trust did have overdraft facilities available to it, though these would of course incur charges. But the situation for the trust, it was clear, is very serious.

By MALACHY TALLACK

At the stall will be Shetland’s member of the Scottish Youth Parliament (MSYP) Nicole Mouat and Shetland Youth Voice chairwoman Emily Shaw.

Anyone interested in joining Shetland Youth Voice is invited to come along and have a chat, and there are leaflets, flyers and freebies available – and maybe some sweeties too!

Shetland Youth Voice is open to all young people aged from 12 to 25 and allows them the opportunity to feed into the democratic process at a local, national and international level.

The stall is supported by the SIC and councillor Bill Manson said: “Nicole and Emily are both playing an active role in Shetland to raise awareness of both organisations. I wish them well for the street stall.”

MSP Tavish Scott said: “You can change the country and change Shetland. Nicole and Emily are leading by example by raising issues that matter to Shetland’s young people. I hope many local people will say hello and encourage Nicole and Emily at their street stall.”

Nicole and Emily said: “These are both great organisations that allow young people like us to voice their opinions and act on issues they feel strongly about. The stall allows young people and adults alike to find out about youth voice and youth parliament, and get involved. See you there.”

Revealing plans for political and constitutional reform in the House of Commons today, including a referendum on the alternative vote electoral system, deputy prime minister Nick Clegg said the Boundary Commissions would be required to set new constituencies within five per cent of a target quota of registered electors “with just two exceptions”.

The decision to maintain Orkney and Shetland as a separate parliamentary constituency is a “welcome piece of commonsense”, according to MP Alistair Carmichael.

He said: “I know that local people will welcome the announcement that the future of Orkney and Shetland as a parliamentary constituency has been guaranteed by the coalition government.

“The work of equalising the number of voters in parliamentary constituencies is important, but was never intended to impact adversely on island communities such as ours. That is why the coalition agreement said that constituency sizes should be more equal rather that absolutely equal, as was the Conservative manifesto position.

‘This announcement is another demonstration of the coalition government’s commitment to island communities.”

Click on image to enlarge

The banks are willing to fund 80 per cent of the proposed £800 million Viking Energy windfarm, leaving Shetland Charitable Trust with £72 million to find from its own funds or loans.

Discussions with the European Investment Bank and four other large commercial banks have left trust financial controller Jeff Goddard confident that £640 million could be raised from a consortium of lenders who, it appears, are falling over themselves to invest in windfarms.Trustees heard on Thursday at Clickimin that they are still about 18 months away from “the big decision” on whether to risk community funds in the venture, which would change the face of Shetland and either bring huge riches into the community purse or financial disaster.

At around the same time the trust is also likely to debate whether to raise funds by selling off some of its shares in the windfarm to local investors for their private gain instead of keeping its share to make profits on behalf of the whole community.

Meanwhile, next month will bring a major landmark for the massive project when the Shetland public get its first chance to view the long-awaited final revised plan for a slimmed-down windfarm – the product of more than half a year spent reworking the previous 150-turbine layout.

The so-called addendum to the application for consent is intended to address the widespread concerns about the scale and layout of a 540 MegaWatt windfarm in the Central and North Mainland.

Mr Goddard expects the final price tag to be less than £800 million, the “working figure” which has been used over the past couple of years.

Recently he has been sounding out four major commercial banks – Lloyds, Royal Bank of Scotland, BNP Paribas Fortis and Barclays, who he said were very interested in how the project would be financed.

Talks with the European Investment Bank have mainly been conducted by Shetland’s partner in the venture, Scottish and Southern Energy (SSE), which already has a windfarm loan for about £330 million from the EU’s non-profit-making development bank.

A similar amount might be possible for Viking with the other £310 million coming from perhaps eight or more commercial banks.

Having SSE on board as an equal partner with the local company Viking Energy Limited (VEL) apparently gives potential lenders more confidence as they have had previous dealings with the giant company, which is a FTSE 100 listed company.

Mr Goddard said Shetland’s “world-class wind”, as demonstrated by the success of the Burradale windfarm, also helped win over backers because it showed the concept worked well in the isles. The trust itself is a good bet for lenders with its £200 million balance sheet and no debts, he said.

He told the trustees in his report: “The banks do have money to lend and they are under pressure to lend it, but to ‘good’ borrowers. The banks see renewables in general as something they want to lend to.”

Scottish and Southern would have to put up £80 million, the trust £72 million and the four private investors from Burradale windfarm would have to find £8 million. Mr Goddard will offer several options to the trust when it comes to finding its £72 million contribution. Currently he favours a mix of perhaps £36 million from trust reserves and borrowing £36 million against windfarm profits.

Paying all £72 million up front in one big cheque would mean no interest to pay, he said, but would require stock market shares to be sold to raise the funds. Alternatively the whole £72 million could be borrowed, secured on the income the trust earns from the windfarm, although banks are keener on lending £36 million. He said he was floating the options this week with a view to opening up a debate.

There was concern from some trustees that existing groups and activities paid for by the trust, costing £11 million a year, could be badly hit during the three years when the trust has spent funds on the windfarm before any profits are generated. Jonathan Wills said trustees would need to decide whether the pain was worth it for the long-term stability for Shetland from the profits.

Mr Goddard said a temporary cut in income to the trust did not mean spending would have to be cut back. Some of the trust’s capital could be used instead. However, he admitted it would require “thought and some nerve” from trustees when it comes to “the big decision”, if they are to make the windfarm happen.

Laura Baisley raised the idea, debated in the past, of offering shares for sale to people in Shetland with spare money to invest. Trust chairman Bill Manson said it had been discussed by VEL which thought it should be left to the trust to decide at a later date.

Afterwards the pressure group Sustainable Shetland, which attended the meeting, said the trust’s funding projections were seriously flawed because they did not take into account the sums needed to service the loans and the interest during the early years before the windfarm starts turning a profit.

For full story, see this week’s Shetland Times.

A consent application for the highly contentious development initially proposed a 150-turbine windfarm down the heart of the Shetland Mainland, though the developers are currently working on an addendum which may reduce the size and number of turbines and is expected to be published in the coming weeks.

But the windfarm has sparked anger and some passionate opposi­tion in recent years. In a represen­tative 1,050-sample poll carried out by this newspaper last summer, 48 per cent of islanders were against the proposal, with 31 per cent in favour and 21 per cent undecided.

This week we asked each of the five candidates at the upcoming poll on 6th May the same five questions which were put to members of the public last year. Only Orcadian busi­nessman and UKIP candidate Robert Smith is outrightly, and outspokenly, opposed. He describes renewable energy projects per se as “economic madness”.

Labour candidate Mark Cooper is 100 per cent behind the proposal, while the other three hopefuls – Conservative Frank Nairn, Liberal Democrat Alistair Carmichael and John Mowat of the SNP – are also notionally in favour of a project of this nature.

By far the most certain of his support for the scheme is Mr Cooper, telling The Shetland Times this week that it would benefit the community “in terms of the energy it will pro­vide and the economic benefit for reinvestment in the islands and the jobs it will create”. He believes it will be “beneficial” to the isles’ environment and that the turbines’ impact on the landscape will be “neutral”. “I think they will blend into the scenery.”

Mr Cooper sees the project as a good investment for Shetland Charit­able Trust (SCT) because the organisation “funds a number of groups in Shetland which in the current economic climate need a secure source of funding and I believe that the Viking windfarm will provide Shetland with a source of revenue for a number of years”.

Taking the polar opposite point of view, Mr Smith described wind turbines as “rubbish” and “absolute nonsense”. “I’m absolutely against all windfarms because without gov­ern­ment subsidy no aero-generator would ever be built,” he said.

“They’re of no benefit to man nor beast. The government are now engaged in the swivel-eyed lunacy of forcing distributors to pay 30p per unit for unreliable wind energy. Imagine if people on low incomes had to pay 30p per unit. Renewables have already added at least 20 per cent to our electricity bills. How many old people have died of cold this winter because of this madness?”

Visually, Mr Smith said, they can be “very elegant-looking structures and add a pleasant contrast to the ancient landscape”, but it is “a pity they’re economic madness”. He sees no prospect of SCT getting a return on any investment: “The government are skint so any subsidies the trust are drooling over will dry up very soon in any case.”

Liberal Democrat Alistair Car­michael, who has held the seat since 2001, has no objection to a windfarm in principle, but said he was concerned about the scale of the original proposal. “That is now being revised by Viking and we shall see the scale of any revised application when it is published.”

He does not doubt there will be a significant environmental and visual impact and “local people must have a voice in deciding if that is an acceptable impact or not”.

“The role of local councillors in this is crucial,” he said. “When the impact assessment of the first version of the planning application was published I was instrumental in getting more time for local people and organisations to consider it and to comment on it.”

Mr Carmichael said the prospect of securing income for SCT was “one of the most positive features” of the proposed turbines. But he is clear that Shetland residents must be given the chance to see for themselves whether it represents a good investment: “The finances of the project must be completely robust and available for the Shetland community to make a judgement. The funding and financial implications for Shetland must be published before a decision is made by the council. We must know what we can expect in return for the development.”

Mr Nairn, meanwhile, said he was pro-Viking “in principle” but supported the development being the subject of a public inquiry “sooner rather than later”. “Objectors need to be able to argue their case and the developers theirs, with the opportunity for modifications, whether major or minor, to be made as one possible outcome.”

He accepted there would be negative impacts locally but that they needed to be balanced against the contribution towards the use of renewable energy. Mr Nairn said he did not know whether it represented a good investment opportunity for SCT but suggested it needed to be “assessed not only on its own merits but also in reaction to its size and the spread of the other investments”.

Mr Mowat said his support was “qualified”, because he was “initially surprised by the size and scale” of the proposal, but he was notionally in favour “provided there is community benefit to Shetland and a power cable is in place that takes power to the Scottish mainland”.

The visual impact was “a matter of personal preference”, he said, adding it would only represent a good investment for SCT “if the required infrastructure is put in place to take the electricity to where it is needed”. He was clear that “more realistic” Ofgem charges for power transmission need to be introduced but believes the investment could be critical in safeguarding Shetland’s future economic well-being.

“Shetland is a windy place and probably the best place in Scotland or the UK for wind turbines to work efficiently and regularly,” said Mr Mowat. “Oil and oil revenues will get less in years to come so an alternative source of income would be useful.”

As to whether trustees of SCT can take decisions as councillors without facing a conflict of interest, the nationalist candidate was somewhat ambiguous: “This would be a government matter, not a local authority matter in the neighbouring Faroe Islands – mature devolved government since 1948. Shetland and Orkney movements and the SNP used to explore this type of issue over 20 years ago. There used to be lively and healthy debate on this. Maybe we need to have that again.”

Mr Smith said there was a “clear” conflict of interest in councillors holding such dual roles, adding: “They are obviously going to be in favour of helping one of the trust’s subsidiary companies.” Again, Mr Cooper was completely at odds with his UKIP opponent, believing there was no contradiction because elected members “can serve in the public interest and be a trustee of the SCT because as councillors it is their job to serve their constituents and act in their interest”.

Mr Nairn said there was “bound” to be a potential conflict of interest and that trustees “should be independent and not be councillors”. Mr Carmichael’s view is that current law will require “a substantial revision of the structure of the trust and the relationship between it and the council”. He said individual councillors would have to take advice as to whether a conflict of interest still allowed them to take part in any decision, adding that it would assist public confidence if the advice was made available for all to see.

Trustees last month decided to postpone reform of SCT’s constitution until after the next set of council elections in 2012 by a margin of 12-3, with six abstentions. That means key decisions on whether to invest huge sums of money in Viking Energy are likely to be taken by the present set of 22 councillors, along with two independents. It remains to be seen what view charities regulator OSCR, which has been pushing for reform and making it clear to SCT that the status quo was not an option, takes of that decision.

The five questions asked of the candidates were:

• Are you in favour of or against the proposed Viking Energy windfarm?

• Do you think the windfarm would be harmful or beneficial to the environment?

• Do you think that the windfarm would have a positive or negative visual impact on the Shetland landscape?

• Do you think the windfarm would be a good or bad investment for Shetland Charitable Trust?

• Do you think councillors who are also trustees of Shetland Charitable Trust can serve the interests of the community when making decisions on the windfarm?

It has long been the case that motorists in Shetland have had to pay between 10-15 pence a litre more than people elsewhere in the country. Many have pointed the finger of blame at GB Oils, the company which has the monopoly on petrol and diesel supplies, rather than garage forecourts. But several political parties this week said the government’s imposition of a rise in fuel duty was only exacerbating the situation and called for a rethink.

Chancellor Alistair Darling had initially intended to impose a rise of three pence per litre this year before backtracking slightly by announcing that the increase would be staged so that the first 1p rise came into effect last week, with further 1p increases scheduled for October and then next January.

But SNP candidate John Mowat described the increase in duty as “unhelpful”, “unwelcome” and “a Poll Tax on wheels” and called for Labour to reverse it, also claiming fuel taxes should be subject to specific reductions in island areas – a case which Northern Isles MP Alistair Carmichael has been pressing in recent months.

Mr Mowat said: “On going round the doors in Orkney, the biggest gripe is the crippling cost of fuel, and it is three or four pence a litre dearer in Shetland. Labour recently decided to scrap the added tax on cider; why not on fuel? Labour’s added fuel tax is a Poll Tax on wheels and while they make us pay at the pumps, we should make them pay at the polls. Many people and businesses are trying to contain the rises in costs.”

Mr Carmichael, meanwhile, pointed to latest figures from the RAC showing that motorists in Shetland were paying £1.34 a litre “although in many areas it is even higher”. He also wants to see the government reverse the increase in fuel duty and the introduction of a derogation scheme that would see drivers in remote and rural areas pay less for their petrol.

“For people in the Northern Isles, transport by private car is a necessity not a luxury. The latest increases in fuel prices have added to household expenditure at a time when many are already struggling to make ends meet. It is absurd and wholly unfair that people in Orkney and Shetland should have to pay over 10 pence more than the UK average price for every litre of petrol they put into their cars.”

Treasury minister Sarah McCarthy-Fry told Mr Carmichael in March that she had instructed her officials to carry out a “proper examination” of how lower rates of duty for island communities, as operated in Corsica, some of the Greek islands and the Azores and Madeira, could be made to work in practice.

But Labour candidate Mark Cooper said he was sceptical about how easy such a scheme would be to administer, suggesting instead that “something alone the lines of a fuel co-operative” would be the best solution. He defended the imposition of fuel duty, pointing out the three pence a litre rise was being “staggered in” over the course of the financial year which was “making it easier for people and their families”.

“The price of fuel is outwith the control of the government because it is measured in dollars and, with the strength of the dollar, that affects the fuel price,” said Mr Cooper. “I understand people’s concerns about fuel because I have family up in Shetland – it has a direct impact on them as well.

“If there can be a scheme to make it cheaper in Shetland and across rural communities, what would other parties define as rural? It may be that centres of population such as Lerwick are not counted as rural because of the size of the population. That would be hard to administer because of all of the HMRC regulations.”

As well as repeating his criticism of Westminster for a lack of action, Mr Carmichael said he had obtained information showing the last action taken on the issue of rural fuel duty by the Scottish government was back in November 2008. “This is a critical issue for people across the Northern Isles and in many other areas of Scotland. It beggars belief that the SNP have done nothing to lighten the burden on drivers in more remote areas since 2008.”

Conservative candidate Frank Nairn highlighted the weakness of sterling on the currency markets, due in part to “uncertainty” over the future state of the British economy, as a key factor behind the spiralling cost of fuel. He suggested that the pound may see an upturn in fortunes in the event of a Tory government, which could help reduce fuel prices. His party’s manifesto includes a commitment to a “fair fuel regulator” whereby when fuel prices go up or down, the level of duty levied would go in the opposite direction.

“If fuel prices were to go up 10p a litre, the fuel tax would come down by about 5p a litre so the increase would be less, reducing the fluctuations,” said Mr Nairn. “Governments can do this because they get a windfall as fuel prices go up anyway. That is our proposal, we will have to discuss how to bring it in, but it is policy to do that. I’m happy to say I support the way the current MP is investigating how other countries with remote areas have variable rates of fuel duty and how it can be done. I don’t say that we accept that yet, but I would certainly support looking into it.”

UKIP candidate Robert Smith, who made clear last week his commitment to people using their cars by saying the only excuse for using public transport if you are older than 17 is “extreme drunkenness”, said he was “possibly” in favour of a derogation for remote areas. But, first and foremost, he wants to see an end to persecution of motorists and a cut in duty rates across the board: “Fuel taxes must be cut,” he said. “The government are creaming off massive amounts of money from fuel at every stage in its journey, from the oil well to the consumer.”

Candidates from the four main parties had already declared that they were standing in the Orkney and Shetland constituency. Along with incumbent MP Alistair Carmichael, who has held the seat for the Liberal Democrats since 2001, Labour’s Mark Cooper, SNP hopeful John Mowat and Conservative Frank Nairn had thrown their hats into the ring. Today Orkney fisherman and businessman Robert Smith announced he would be standing for UKIP.

Mr Carmichael won just over half the votes in the constituency in the last UK election five years ago, giving him a 6,627 margin of victory over the second-placed Labour candidate.

The seat has been held by the Liberals since 1950. Both Mr Nairn and Mr Mowat have previously stood in the constituency, while it is the first outing for the 25-year-old, Edinburgh-based Mr Cooper. Any other individuals or parties wishing to field candidates have until 20th April to announce that they are standing.

Transport looks likely to be among the key issues at stake in the Northern Isles over the next four weeks, with concern particularly in Shetland at recent Scottish government-proposed cutbacks to NorthLink’s lifeline ferry service between Aberdeen and the isles. There is also a growing clamour for action to address the extortionate fuel prices being paid by those living in remote rural and island communities.

The outcome of the constituency battle will be declared in Kirkwall by returning officer Alistair Buchan, the chief execuitve of Orkney Islands Council. Depute returning officer Jan Riise is travelling to Orkney tomorrow for a meeting to discuss logistical matters and contingencies with regard the counting of the ballot.

Nationally, polls show the Conservatives remain ahead of Labour – which has been in government for 13 years – but it is far from clear that leader of the opposition David Cameron has enough support to gain a working majority in the House of Commons. Some pundits are predicting that Britain could end up with a hung parliament for the first time since 1974.

Anyone who has not yet registered to vote can do so by visiting www.orkney-shetland-vjb.co.uk/ELECTORAL.html, or contacting the electoral registration officer for Shetland on (01595) 745700.

Meanwhile, the Electoral Reform Society, which campaigns for a more representative electoral system, declared today that the Orkney and Shetland seat was one of 36 – 60 per cent – of those in Scotland where the contest was over before it had begun.

Willie Sullivan, the ERS’s Scottish director, said: “Scottish electors are being cheated. Voting in the general election should be important for everyone, but in more than three out of five Scottish constituencies the result is clear before the voting even begins. People want their say on who represents them at Westminster, but with the present system parties can safely ignore the views of most electors.

“In Scotland we’ve gone further than England and Wales in developing our democracy. In electing the Scottish Parliament and in local government we know that, with the right system, votes matter everywhere. We should not put up with a system that results in there being no serious political contest in most of Scotland.

“Scotland has four main parties, and others such as the Greens are also very significant. We have a real diversity of political views and no one party is dominant. Elections in which one party knows it will win and the others know they will lose plainly do not reflect the Scottish reality. A Victorian voting system designed for a battle between Whig and Tory cannot deliver for voters in a modern Scotland.”