Letter from Westminster
For the first nine years that I was in Parliament autumn statement and budget days were routinely an excuse for me and my colleagues from different parts of the Highlands and Islands to get to our feet and to demand a lower rate of duty paid on petrol and diesel to take some account of the higher prices that we pay at the pumps compared to people living in towns and cities on the mainland.
On Friday I got the telephone call that told me that after years of asking we had finally got our way. The Council of Ministers meeting in Brussels had given formal approval to the UK application for a derogation allowing them to charge that lower rate of duty – five pence per litre to be precise.
I realise as well as any other island resident that five pence per litre is by no means the full amount of the difference but it is on any view a significant start. That is why the Chancellor announced the suspension of a 3p per litre fuel duty increase to the House this week, and scrapped plans for a further 2p increase in a year’s time. However, the derogation is a big step in the right direction and something that will be welcomed by people across the Northern Isles.
It may not be the end of the story on road fuel prices but it is a highly significant beginning. It is an acceptance by government that the local market in petrol and diesel has failed. If that failure is accepted by government then surely it becomes more difficult than ever for the Office of Fair Trading to continue to deny that there is a problem.
Much has been made by other parties of the time it has taken to get this derogation. I suppose it is a natural if regrettable part of politics that you have to be attacked for something and if you can’t be attacked for not doing what you said then the next best thing is to attack for not doing it fast enough. It is a pretty lame line of argument when you consider the realities.
The commitment to take action was put into the Chancellor’s emergency budget last June. The work on making the case was then started by the Treasury after the Comprehensive Spending Review and the formal application was made to the EU Commission in March of this year.
That the processes of the EU are slow and complex should be news to no-one. The final sign-off, however, came on Thursday and on Friday the Treasury laid in parliament the necessary documents to put the scheme in place.
It is worth remembering that this is only happening because of the presence of the Liberal Democrats in the coalition government. This is something that Labour in government denied could ever be done. The Conservatives in opposition never supported it. I have always maintained that the decision to go into government with the coalition was business, and certainly not pleasure. This derogation is one of the dividends resulting from that choice.
Alistair Carmichael MP