Agriculture Business Government Westminster

Red Diesel Cliff Edge Edging Closer – Lockhart

DUP MP Carla Lockhart has been actively mobilising the local construction, waste and transport industries to speak out against the proposed change to the red diesel rebate.  This change will take effect as of 1st April with many businesses facing a cliff edge, adding to the already spiralling costs of fuel, materials, labour and electricity for businesses. In recent days the National Federation of Builders have said, “In diesel, the price hike will be considerable and comes at a time when even the tiniest shifts in prices can put businesses in jeopardy”, warned the trade body.  Its call is echoed by the Road Haulage Association which has told Chancellor Rishi Sinak that many “small hauliers could go bust” and more locally the Mineral Products Association have said, “‘We believe the removal of the red diesel rebate, due to take place on 1 April 2022, is premature and must be reversed. In short, it is a cash grab dressed up as an environmental measure. The policy is flawed and does not encourage a move to zero-carbon fuels, as firms will simply switch to standard white diesel, with exactly the same carbon content.”

It is estimated that the cost to construction of this policy will be £20m to £25m and is likely to be passed on to private home builders, driving up house prices and it will undoubtedly impact the number of Government contracts available to the sectors with less money for building schools, hospitals and roads.

Speaking on the issue the Upper Bann MP said, “Unfortunately the Government are continuing to press ahead with the planned changes to the red diesel rebate.  They seem intent on pushing the industry over the cliff edge on 1st April.  It is clear this may lead to particularly small or medium sized construction businesses going out of business. It will increase transport costs for fresh food and will drive up house prices, and generally construction costs. It will also see an end to charity tractor runs which raise a significant amount of money for charity every year. 

The Government continue to say this is aimed at improving air quality and assisting in reaching NetZero, yet they have not once quantified by how much it will improve air quality.  Reality is it will not in anyway improve it given that there are no alternatives for the industry.  Whilst hydrogen powered plant is being developed it will take some years for it to be made available.  It is imperative that the Government give time and space for the alternatives to be developed.  The industry is in no way ducking their commitment to the environment and are ultimately asking for a realistic timescale for developing alternatives and then for the purchase of them in a phased approach.  They agree with the policy but the timing is wrong.

This is a UK wide problem, but the industry in Northern Ireland faces the additional challenge of now being placed at a competitive disadvantage against industry in the Irish Republic, and the prospect of smuggling of diesel and mineral products is also increased. For local firms who have significant business in the Irish Republic, this is likely to cost them this trade. That is deeply unfair, and the Government must act to protect these businesses.

We need the Government to rethink this policy and step back from the 31st March deadline. We need a transition period to allow the intense development of alternative fuels and machinery that can be used using such fuels. The Treasury still has time to act. I urge it to do so.”


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