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No rural fuel rebate extension before 2015
Published:  17 September, 2014

The extension of the rural fuel rebate scheme to more areas of the UK will not be enacted until early next year at the earliest, and could be delayed even longer, a Treasury official has warned.

Replying to a query about the timescale from the PRA, Helen Dickinson, deputy director, environment and transport tax at HM Treasury, said: “The extension to the rural fuel rebate scheme requires EU approval before we can bring it in, and the application is currently with the European Commission.

“We’re hoping to get the approvals needed this year, which would enable us to bring in the legislation early in 2015 and to bring the scheme into force before the end of this Parliament.

“However we can’t absolutely guarantee this as there’s a risk the EU process could take longer than expected. As well as approval from the EU Commission itself, we also need all 28 EU member states to approve the scheme by unanimity.

“We’re continuing to do everything we can to get the necessary approvals quickly and to ensure the Commission have all the evidence they need to make their decision.”

Lesley Goodman, who runs Barbrook Service Station in Lynton, Devon, one of the areas covered by the proposed extension, said it was hugely disappointing that it was taking so long.

She said: “It would make such a difference to us as a remote rural garage if we could offer the discount. Customers are asking about it on a daily basis.

“It will mean more paper work for us because we will have to claim back the rebate, but in a remote rural area people are so dependent on their cars and 5ppl off would make a big difference for them.”

The current rural fuel scheme only operates in the Inner and Outer Hebrides, the Northern Isles, the Islands of the Clyde and the Isles of Scilly, and enables fuel retailers to claim 5ppl relief on sales of unleaded petrol and diesel.

In July last year the chief secretary to the Treasury Danny Alexander announced that the government wanted to extend the scheme to more rural areas.

The change requires EU approval and he requested evidence from fuel retailers to support the submission. However, when the list of 10 areas selected was published in October many other areas protested that they had been unfairly excluded and the consultation was reopened.

A final list of 17 areas – 13 in Scotland and four in England – was submitted to the EU in January this year.