Rural Fuel Duty Relief

Brendan O'Hara Excerpts

Wednesday 7th January 2026 Westminster Hall

[Ian Roome]

Fifteen years ago, Barbrook in my constituency was officially one of the most expensive places to fill up in England, but thanks to the scheme it has stayed competitive on price, as a small business that employs four people all year round, in an area where employment can be highly seasonal. During the summer, Barbrook’s fuel deliveries increase to several tankers per week because of extra demand, driven mainly by tourists visiting Exmoor national park and the famous North Devon coast on holiday.

I am also told that Barbrook filling station rescues many of those visitors—people who do not understand the extra challenge of driving long distances on small rural roads, or who do not plan for the extra fuel consumption of their journey. Many rural communities already suffer from very sparse public services, and fuel for transport is an important part of anyone reaching essential healthcare, such as their local hospital or dentist. As I know from speaking to chemotherapy patients at North Devon district hospital, where I worked before I was elected to this House, access itself is half the battle.

My Liberal Democrat colleagues and I—including my right hon. Friend the Member for Orkney and Shetland (Mr Carmichael), my hon. Friend the Member for Westmorland and Lonsdale (Tim Farron) and others—champion the real needs of rural communities, as do colleagues who are here today. We have argued for the rural fuel duty relief scheme’s importance and for extending it to many more rural parts of the country.

However, support for the scheme should really be cross-party. By my count, at least 11 directly impacted rural constituencies are represented by MPs from Labour, the Conservatives, the Liberal Democrats and the Scottish National party. There are also many neighbouring rural constituencies with villages that rely on a filling station just over the border that is supported by this tax relief.

Since 2011, it has become a feature of Budgets under successive Governments that fuel duty will be frozen. That has benefited motorists across Britain, yet in March 2022, a further 5p cut in fuel duty was introduced and then held in place, even as the value of the rural fuel duty relief scheme continued falling in real terms. That means that in recent years we have gone backwards: many of our most rural taxpayers have effectively increased their support to motorists in some of the best connected parts of the country. Motorists in urban communities not only benefit from having more public transport alternatives but often have numerous filling stations to choose from—all competing on price, to the benefit of local people. By contrast, many of my constituents count themselves lucky to have even one filling station in their area.

The Government have stated that economic growth across the country is their top priority for this Parliament. In parts of the country that are distant from major infrastructure projects, such schemes are an important measure, supporting small businesses, farming and tourism, helping young people to access opportunities, and helping patients to access essential healthcare. At a time when the Government are increasingly under fire for their policies towards rural and farming communities, updating the rural fuel duty relief scheme would be one way for them to demonstrate their concern about those families who live in rural areas and the problems they face in their daily lives.

[Brendan O’Hara (Argyll, Bute and South Lochaber) (SNP)]

I sincerely thank the hon. Member for securing this debate. My constituency of Argyll, Bute and South Lochaber is 10,500 sq km in size, with 23 inhabited islands; it is absolutely vast. Life is difficult for people living in rural areas and anything that we can do to make life a bit easier for them should be considered. Does he agree that the scheme should not only be further extended to cover more people in rural areas, in order to stop the scourge of depopulation, but that the value of the scheme, which has declined by 35% since 2012, should be restored by this Government as soon as possible?

[Ian Roome]

I agree with the hon. Gentleman and thank him for that input.

When so many people are struggling with the cost of living, schemes like this one are a concrete example of how tax relief can have an out-sized impact. A relief of 5p per litre would be welcome anywhere, but it is particularly valuable to those constituents of mine who have no choice but to drive, in an area where gross median wages are £84 a week less than the national average.

Just last week, the Prime Minister stated that the Government would spend this new year proving to people that they can support them with energy costs, warm homes and the cost of living. My constituents see their fuel costs displayed digitally on a sign by the side of the road every single day. The rural fuel duty relief scheme makes a material difference to many of my constituents and to tens of thousands of people in rural communities across the United Kingdom.

I will close by asking the Minister some questions. Does the Treasury recognise that time and inflation have effectively bled the funding of the scheme by around 30% since it was introduced? Will the Government consider updating the value of the scheme in the coming year to rectify that gap, at least in part? Just a few weeks ago, it was highlighted in the Treasury Committee that the Treasury lacks a suitable review process for existing tax reliefs. What more can be done to ensure that in the future small but important schemes such as this one, which are a lifeline in rural areas like mine, do not get left behind again?

--- Later in debate ---

[Dan Tomlinson]

I note, as I am sure others in the Chamber will, just how forensic is the hon. Member’s understanding of some of the small businesses in his constituency. That is to be very much commended. If he would like to write to me on that point, I would certainly like to raise it with HMRC. Of course, it is not appropriate for me as a tax Minister to get involved in individual tax affairs. That said, the general point is about administration, and the extent to which we are getting the balance right between ensuring that we stick to the rules as set out, and having an appropriate level of flexibility. That is something that I would happily raise with the Department, if he were willing to write to me.

The hon. Member for North Devon and many others have suggested that the Government should increase the rural fuel duty relief in line with inflation. As I set out earlier, since the relief’s introduction, it has remained at 5p, but the main fuel duty rate has also remained at the same level—or, more recently, has fallen. I am aware that there are differences across the country, and there may have been differentials in the increase in fuel prices in some areas. However, the fuel costs are broadly the same as they were in 2011, if not slightly higher; it was roughly 130p for a litre then, compared with around 135p now.

[Brendan O’Hara]

The hon. Member for Na h-Eileanan an Iar (Torcuil Crichton) made the point that getting this rebate was one of the few successes of the coalition Government. The reason there was no political reward for it was that, at £1.60 a litre in rural Argyll, Bute and South Lochaber, it does not feel like a benefit. If the Minister will not make it index-linked, can he tell us what mechanism the Government have put in place to check that this rebate—albeit scant—is actually reaching the consumer? It does not feel as though it is for people living in rural communities.