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STUDY URGES GOVERNMENT ACTION TO REDUCE FUEL PRICES FOR REMOTE COMMUNITIES

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Highland and Islands households are paying£88m a year more on motoring costs than counterparts in central Scotland...
Highland and Islands households are paying£88m a year more on motoring costs than counterparts in central Scotland due to high fuel costs and the high dependence on private transport and car ownership. The figure is revealed in a study commissioned by The Highland Council and Highlands and Islands Enterprise to demonstrate the adverse impact of fuel duty in the most rural area of the United Kingdom, where incomes are much lower than the national average and the cost of services is much higher.

The study will be sent to Scottish executive minister for transport and the environment, Sarah Boyack, as well as members of the Scottish parliament, the treasury and members of parliament in the hope that it will provide the further evidence required to make a breakthrough in achieving parity on fuel pricing in the UK.

The study says that£17.8m of the monies lost to the Highlands is attributable to higher fuel prices in an area where the cost of filling a tank can be as high as£7.50 more than in Edinburgh and£16 more than in Southern Ireland. This is the equivalent of creating 592 full-time jobs.

It is also estimated that up to afurther 124 full-time jobs could be created in the tourist sector within the area if fuel prices were the same as in central Scotland, reflecting the fact that every£1 spent on fuel creates significantly less employment than£1 spent in hotels, bars and restaurants.

The report, produced by economic consultants EKOS Limited, pulls together published and unpublished material and focuses on three case studies in Wick, Lochinver and South Uist. It highlights the extensive use of company vehicles, taxis and private cars to get staff to and from work and long distances travelled to access community facilities. It also states that fuel duty accounts for 60% of the purchase price of al litre of unleaded petrol, with the price having risen to 47p per litre over the past five years.

It concludes with the following recommendations:

That fuel prices are lowered by reducing the rate of fuel duty paid at fuel stations within certain parts of the Highlands and Islands. This would be through using a rebate system for stations to allow lower prices to be charged.

That consideration is given to targeting low income households by offering them access to fuel prices at a discounted rate.

That there is an explicit policy statement from government regarding the underlying objectives of the current fuel duty policy and its relationship to other rural/regional development policies and initiatives.

That there is effort placed in developing concepts that would reduce the price of fuel within the Highlands and Islands, such as new fuel types and mobile filling stations.

That more data and research be made available at the Highlands and Islands level to inform policy developments that affect fuel prices.

Alison Magee, The Highland Council's vice-convener, and chair of the Highlands and Islands action group on hydrocarbons, said: 'I called for this study to challenge the treasury view that fuel duty was a fair tax and did not adversely impact on our economy. I believe the report refutes comprehensively the treasury statement and significantly strengthens our call on the government for parity in fuel pricing across the UK.

She said: 'The report pulls together the arguments we have presented in recent times and adds a signficant amount of hard fact which will help us greatly in progressing a campaign, which is gaining momentum as each week passes. We hope all political parties will get behind us and push hard for change.'

Bill Fulton, who is vice-convener of the Scottish Forum Against Poverty, said the government should act on the report, given its support for reducing social exclusion. 'The trouble is that many families feel excluded in rural areas of the Highlands and Islands because of the prohibitive costs of travel to participate in community events.'

Highlands and Islands Enterprise have highlighted the negative effect which high fuel prices can have on efforts to develop the economy of the area. The additional costs can affect the viability of existing and planned new businesses. Fuel costs can also prevent people in remote areas, where car dependency is high, from taking advantage of some employment and training opportunities.

HIE's head of economics Stuart Black said: 'High fuel prices seriously affect the economies and businesses of the Highlands and Islands, and they also have a significant impact on local people living in more remote communities, especially the lower income households. The unavoidable costs of travel account for a greater percentage of their income, which means they have less to spend on other goods and services in their areas.'

The study is available on the council's web site www.highland.gov.uk through What's New.

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