The ‘rural premium’ refers to the higher prices that communities in remote rural areas pay, relative to urban areas, to access the same goods and services. In a new report published today, MPs on the Westminster-based Scottish Affairs Committee highlighted three key areas - energy, food security and transport – and finds that rising costs in each sector disproportionately affects rural communities in Scotland.

Examples cited by the Committee include exposure to fuel price inflation due to being more reliant on transport, a reliance on expensive alternative fuels for off-grid households and higher charges for food deliveries to remote locations.

The report acknowledged the unprecedented package of support provided by the UK Government which has helped to mitigate the impact of price spikes.

The Committee concludes that some schemes, however, had prioritised administrative ease to accelerate funds getting to people rather than specifically targeting financial support for those who need it most. MPs on the Committee found that financial support tailored towards remote communities experiencing the ‘rural premium’ would have more effectively alleviated the acute and unique pressures those households face.

Evidence submitted to the Committee as part of the inquiry showed that prior to the sharp increase in fuel prices, the highest rates of fuel poverty in Scotland could be found in the most rural regions – Na h-Eileanan Siar (40%), Highland (33%), Argyll and Bute (32%), Moray (32%), Shetland Islands (31%) and Orkney Islands (31%). The Scottish Government has estimated that 57% of households in rural areas would be in fuel poverty by April 2023.

The Committee heard that food insecurity had led to a ‘cost of surviving crisis’ for some in particularly remote areas, while delayed plans to improve ferry and road infrastructure has further exacerbated difficulties for rural communities.

MPs are calling for the Scottish and UK Governments to work together in order to better understand the scale and complexities of the challenges facing rural communities in Scotland. Agreeing consistent definitions of food poverty and more effective collaboration to overcome transport infrastructure challenges would be welcome steps forward in tackling this issue, the Committee said.

Chair of the Scottish Affairs Committee, Pete Wishart MP, said: “During the cost-of-living crisis, people living in remote parts of Scotland have found themselves in a perfect storm of poorly-insulated, high energy usage homes with an extended journey to local amenities and food shopping bills off the charts.

“Schemes implemented by both the UK and Scottish Governments have been welcome in large parts of Scotland, but the reality is these households have been lumbered with a ‘rural premium’ that hasn’t been adequately addressed by state support.

“We must learn the lessons from the economic challenges households have faced over the last few years. I hope both the UK and Scottish Governments will use this time to properly understand the support these communities will need to prevent them falling further into poverty should we face similar problems in the future.”