Fuel Costs

Simon Hart Excerpts

Monday 7th February 2011 Commons Chamber

[Justine Greening]

We have yet to decide the exact scope of the pilots. I assume from her question that the hon. Lady would like her area to be included. No doubt she will write to me formally. I will take her comments on board. As I said, we are already working towards putting in place the pilots for a rural fuel duty rebate which will reduce the cost of fuel in the most remote areas of Britain. As with trying to tackle the feed-through of unpredictable oil prices to the pump prices, the previous Government rejected that outright, but the coalition Government are committed to getting it under way.

As my right hon. Friend the Chief Secretary announced in October, we wish to conduct a rural fuel duty pilot and look at how a rural fuel duty rebate could work in practice. We want to examine the underlying issues and see how that could be applied. The initial pilot could deliver a duty discount of up to 5p per litre on all petrol and diesel. That would save some drivers in rural areas upwards of £500 a year.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

As part of the derogation, will my hon. Friend please make sure that the definition of “rural” is a great deal more scientific than it has been in previous attempts? Will she also make sure that the interests of Wales are not left out?

[Justine Greening]

My hon. Friend makes a relevant point. One of the reasons that our initial discussions with the European Commission are so important is that they are an opportunity to scope properly any rural fuel duty rebate, why we would introduce it, where it would apply and the basis on which it would take place. In other countries, specific arguments have been made for the particular areas where such rebates were allowed by the European Commission. The benefit of going through the process, as we are doing, is that it maximises the chance that any proposal that we make will be given the go-ahead.