The National Federation of Builders (NFB) wrote to the new chancellor of the exchequer Nadhim Zahawi on 8th July 2022 asking him to reinstate the construction industry’s access to red diesel.
The construction industry has not been allowed to use taxpayer-subsidised red diesel since the beginning of April this year – a measure brought in by the previous chancellor, Richi Sunak, who quit the cabinet on 5th July and is now considered a favourite to win the Conservative party leadership election that his resignation substantially triggered. Whoever wins that election will take over as prime minister by September.
Nadhim Zahawi, also running for leadership, may not be in the Treasury for very long, but the NFB suggests that he could at least do the construction industry a favour while he is there, and revive access to the rebated fuel. The move would save around 40 pence per litre of diesel burned.
Richard Beresford, chief executive of the NFB, said: “Covid stopped the development and growth of alternative fuels and machinery, and compared to the cost of red diesel pre pandemic, white diesel is now 200% higher. As we warned, fuel thefts have increased, the alternative fuel competition isn’t yet delivering, almost half of industry can’t access the ‘super deduction’ and businesses struggle with the accounting for ‘annual investment allowance’.
“The previous system, where red diesel was simply accessible, meant everyone benefited; the new one penalises industry and especially small business and sole traders. The new chancellor should reinstate the red diesel access for 12 months, something his predecessor chose not to do even after a major industry campaign.”
Richard Beresford concluded: “With the war in Ukraine, semi-conductor shortages impacting the growth of electric plant machinery, global lockdowns hindering bio-fuel production, new government regulation putting up the price of construction and a desperate cost of living crisis, the removal of red diesel access for industries that helped pay for furlough but broadly didn’t avail of it, is hindering not helping Britain.
“The chancellor and [current] prime minister say they believe in lower taxes but will they use one of the only energy mechanisms they have and reinstate the construction industries access to red diesel for the next 12 months?”
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