Coalition scraps furl duty increase

Alistair Carmichael MPNorthern Isles MP Alistair Carmichael has welcomed news that a planned fuel duty increase of 3p per litre that was due to come into force in August 2012 has been scrapped.

The duty increase, which was set out in Labour’s spending plans ahead of the 2010 election, was originally due to come into force in January 2012 but was put back by the Chancellor of the Exchequer during his 2011 Autumn Statement.

Speaking after the news was announced during Treasury Questions in the House of Commons, Mr Carmichael said that he was sure the decision would be welcomed across the Isles.

Commenting, Mr Carmichael said:

"The coalition has always made clear that helping motorists hit by high fuel prices was a genuine priority and I know that the announcement today will be welcomed across Orkney and Shetland. Transport costs have always been a key issue in the Isles. While we still need to see more from the Office of Fair Trading and fuel wholesalers, the UK government is determined to do what it can to help local motorists.

"I know that many people in Orkney and Shetland were concerned over the impact that the planned 3p rise would have had if it had came into force in August. Scrapping the increase was the right decision taken for the right reasons. The government’s efforts to ensure that we are spending money responsibly mean that this tax freeze is fully funded and will not impact on other key spending areas.

"This announcement is not a one-off. A substantial fuel duty increase was cancelled last year and the level of tax was actually cut by 1 penny per litre. Today’s news means that people across the UK are paying 10 pence per litre less than they would have been under Labour’s fuel duty escalator. In the Northern Isles there is a further 5 pence per litre reduction so we are paying 15 pence per litre less than we would have been but for the decisions of the coalition government.

"Locally, of course, it is clear that more remains to be done to help narrow the divide between the prices we are asked to pay and the cost of fuel on the mainland. Oil prices have been falling in recent weeks and we need answers from the wholesalers and traders as to why this has not been reflected in the cost of their fuel."