Letter from Westminster

Betrayal seems to be one of the most over used words in Scottish politics at the moment and it was getting plenty of overtime in this week as the rocketing price of petrol and diesel hit the headlines. Now I don’t mind being criticised for those things where as part of a coalition I have had to compromise and not to do things that I would otherwise have wanted to do. What is a little more difficult to stomach, however, is accusations of betrayal in relation to something that we actually are delivering on a promise made. I refer here, of course, to the proposed pilot scheme for a lower rate of duty on petrol and diesel for the isles.

The government’s commitment to this was made clear in George Osborne’s emergency budget in June. As Danny Alexander then made clear in a speech in October this was something on which work was started and the government were working towards a five pence per litre reduction. This is something for which EU approval is required and since then that process has been ongoing. The permission that is required is for a derogation from EU state aid and competition rules. These, as many people in Shetland have found out to their cost in recent years, can be complex and are expensive if you get it wrong. Before a formal application is made there are what is called “preliminary discussions”. It is unfortunate that this sounds a bit like two people sitting down to have a chat over a cup of coffee but I am told that it is a bit more than that. It allows Treasury officials in the UK to explore with their counterparts in Brussels what will be required by way of supporting evidence and what should be contained in the formal application.

The formal application, I am told, should be able to be made in April. That, of course, will take us beyond the budget and it is this that seems to have excited some opposition politicians. I do not understand why this should be so. No-one in govern­ment ever said that this measure would be dealt with in the budget. Likewise the application when it is eventually approved by the EU (by unanimous agreement of the EU Council), will not have to wait for a budget to be introduced.

Once the formal application is made then we will be working to the EU Commission’s timetable.

So where does the betrayal come from? The government is doing what it said it would do and which local people here have said for years they wanted. Nobody ever said this would happen overnight or that it could be done by waving a magic wand. The Prime Minister is keen for the Treasury to work urgently on a fuel price stabiliser. This would take some of the financial pressure off motorists and businesses as the price of oil continues to increase. This is something where we could see an announcement in the budget. He at least recognises there is a real problem here.

Alistair Carmichael MP


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