Dave Thompson MSP

SKYE, Lochaber and Badenoch MSP Dave Thompson has highlighted problems feared by West Highland filling station owners following the introduction of a fuel discount scheme a few miles away on Skye.

During a debate on fuel pricing, Mr Thompson told the Chamber that he had been contacted by representatives of filling station owners on the mainland close to Skye about their concerns that their businesses could be affected by the availability of cut-price fuel just 20 miles away by road. He also told fellow MSPs that his suggestion that the discount scheme should be expanded to include all disadvantaged rural areas had been rejected by Danny Alexander MP, Chief Secretary to the Treasury, despite the MP’s numerous pledges during his campaign for re-election last year to do all he could to secure lower fuel prices for his constituents.

Mr Thompson and fellow Highland MSP Fergus Ewing noted that most of the price of fuel at the pumps consists of tax levied by Westminster.

“While any reduction in fuel prices for rural areas is welcome, the 5p cut on Skye will merely make prices a little less exorbitant than they currently are but still much higher than those seen closer to urban centres,” Mr Thompson said.

“However, I was concerned to hear of the scheme’s potential impact on the fortunes of fuel retailers whose premises lie just outside the area where the discount will be applied.

“That is why, in October, I wrote to Mr Alexander and suggested a more just way of introducing the policy would be to extend its reach to include West Highland businesses.

“The distance between these and their nearest mainland competitors is far greater than the 20 miles between Broadford on Skye and Inverinate at Kyle so the problem of unequal competition they fear could be alleviated.

Mr Thompson continued: “I believe that the ideal solution is the implementation of the long-standing SNP policy of a discount for all disadvantaged rural areas coupled with a fuel price regulator, where the level of tax on fuel would be decreased as wholesale prices rise to give price stability.

He added: “I was disappointed, if not entirely surprised, to note that there were no Lib Dem MSPs in the chamber for this important debate.

Note:

Official Report of speech:

Dave Thompson (Skye, Lochaber and Badenoch) (SNP): I add my congratulations to Stuart McMillan on securing the debate. In my constituency, and throughout the Highlands and Islands, the issue of high fuel prices has long been contentious. Although the Greenock Telegraph feature that is mentioned in Stuart McMillan’s motion serves to highlight price discrepancies between filling stations, the issue in the Highlands is not so much that retailers are profiteering but that Westminster is cashing in by taking too much tax from the motorist and that fuel prices in rural areas are higher than they are in towns and cities.

Recognising that, Lib Dem MP Danny Alexander based much of his 2010 re-election campaign on promises to take action on the issue. Of course, his re-election was successful and he is now chief secretary to the Treasury with power to act and nowhere to hide, unlike his Lib Dem colleagues in the Scottish Parliament who are all hiding tonight—there is not a single one of them in the chamber—unless of course Murdo Fraser is a proxy Lib Dem for the coalition parties. I see from the horrified look on his face that he is not.

Danny Alexander tried to implement a little bit of his promise and, this autumn, after months of delays and excuses, island motorists heard that next year they will see a small reduction in the price of their fuel.

Although any reduction in the cost of fuel is welcome in areas in which the use of a car is essential, I am afraid that the impact of the 5p cut in the limited geographical area in which it has been delivered has only made the price a little bit less exorbitant. It is still much higher than the price that we see in other parts of the country. In Skye, the 5p off is welcome, but it must be balanced against growing public anger throughout mainland Highland that the Lib Dems have failed to deliver on their main pledge to have cheaper petrol in rural areas, which persuaded so many to trust them with their votes.

Earlier this year, I was contacted by several independent filling stations on the west Highland mainland who feared that cut-price competition on Skye would fatally undermine their business. For instance, today, at 140.9p per litre, there is no difference between the price of petrol at the pumps in Broadford on Skye and at pumps in Inverinate, which is just 20 miles away on the mainland. Diesel is actually a penny cheaper in Broadford. With the fuel discount, the difference would be 5p for petrol and 6p for diesel, with the mainland filling stations being disadvantaged.

In October, I wrote to Mr Alexander to make the case for applying the discount to all disadvantaged rural areas. Sadly, that commonsense approach appears to have been beyond him, as he rejected my call. My letter to him suggested a two-stage roll-out of a rural petrol discount programme, to be applied initially to the west Highlands, to tackle the issue of uneven competition that is feared by those petrol retailers close to the fuel discount area, and then to all rural areas.

However, that would need to be supplemented by implementation of the SNP’s long-standing policy to have a fuel duty regulator for all areas, which would reduce the Government’s tax take from fuel sales as prices rose, to allow the maintenance of stable prices at the pumps.

Given that Scotland is the European Union’s largest oil producer, it is surely not too much to expect our citizens at least to have stability in the cost of their fuel, even if they pay a higher price for petrol than people in almost the entire continent.

The newspaper feature that is referred to in Stuart McMillan’s motion sounds like an example of the reliable information that is needed to enable the fuel market to operate efficiently, and it should help to equalise prices in the Inverclyde area. I congratulate those involved on that.