CHANCELLOR George Osborne has raised hopes that even more Highland motorists could be given the chance to buy cut-price petrol and diesel.
He revealed he “would like to go further” than the 17 mainland communities already in line for the 5p-a-litre discount.
Mr Osborne also made a tacit admission for the first time yesterday that his department had blundered by deciding to offer the cheaper fuel on the basis of postcodes. Officials caused fury across the north last year after saying that some villages were not remote enough to qualify because they shared the same Highland postcodes as towns which were miles away.
The 5p discount has been a flagship Treasury scheme, driven forward by Highland MP and Chief Treasury Secretary Danny Alexander.
After being introduced on the islands two years ago, the initiative has been plunged into controversy over plans to extend it to the mainland. A flood of complaints from north filling stations followed initial Treasury proposals which excluded the whole of Sutherland.
UK ministers performed a U-turn, expanded the process and finally applied to the European Commission in January for permission to extend the rebate to 17 mainland postcodes, including 13 in Highland.
However, there has been ongoing anger in Bettyhill, which was left off the application because it shares a postcode with Thurso, about 30 miles away.
Mr Osborne accepted criticism at Westminster yesterday of the postcode system and said a new model would be considered for a potential further application.
At the Treasury select committee, North MP John Thurso quizzed the chancellor on the scheme, criticising the use of postcodes. Mr Osborne said: “We’ve used postcodes because they’ve been the available data set, but the point you make about the way postcodes are constructed is a very fair one.”
Mr Osborne suggested that the discount project could be extended again, using an improved system to determine the population density.
“By the way, we would like to go further,” he said. “But the European Union restricts us and we have to fight a hard argument in Brussels for including as many areas in Scotland, England Wales and Northern Ireland as possible.
“So we are looking at whether there’s a better assessment of areas.”
A UK Government source confirmed to the Press and Journal last night that there could be a further application. “We need to see if we get this application through first, before we cross the next bridge,” he said.
Mr Osborne also committed to explain the decision to use postcodes in writing to Lord Thurso next week.
Last night, the Liberal Democrat MP for Caithness, Sutherland and Easter Ross, said: “The chancellor stated that he understood the problem and I take his comments as a clear commitment to review this to seek a better formula. This is much more than the Treasury have stated before and indicates a willingness to engage which was previously absent.”
Rob Gibson, SNP MSP for Caithness, Sutherland and Ross, criticised the discount project. He said: “The ill-thought-out scheme doesn’t much solve the problem anyway. It may ameliorate it for a short time, but we know wholesalers can jack up the price of fuel.” He called for a fuel duty regulator to moderate prices.
A Treasury spokesman said: “The application to extend the island fuel discount to some mainland areas went to the European Commission in January and is proceeding as planned.
“As the chancellor said, the government will keep the design of the scheme under review, as with all tax policy.”