Despite almost 16,000 signatures to a petition calling to delay the removal of red diesel entitlement from the construction industry, a concerted and united effort by the construction sector appealing directly to the Chancellor in a letter co-signed by the National Federation of Builders; Federation of Master Builders; National Federation of Demolition Contractors; Scottish Building Federation; Right Fuel Card; Construction Plant-hire Association; Builders Merchants Federation; Build UK; Construction Alliance North East and SPOA; no mention was made of the legislation which will likely result in companies going out of business.
Speaking about the Spring Statement, Callum Mackintosh, President of SPOA, said: "This is yet another blow to the construction sector. Over the last few weeks, and since the Russian invasion of Ukraine, the price of fuel has skyrocketed. We have come together as an industry to reason with the Chancellor to delay the removal of red diesel entitlement for the construction industry. Whilst the fuel duty cut of 5p per litre is welcome and does represent a reduction in duty of 8.63% on both red and white diesel, the reality is that the construction industry faces an increase of fuel duty of 42.77p per litre from 1st April.
-- Advertisement --
"With cost pressures on construction at unprecedented levels, the spring statement should have been the chancellor’s opportunity to inject confidence into the construction and associated industries but instead the industry was disappointingly overlooked.
"Furthermore, the Chancellor could have taken the opportunity to put some of the projected £1.28bn revenue raised over the next 12 months from red diesel rebate removal to good use. 2021's red diesel replacement competition of £40m can be seen as nothing more than virtue signalling by our members now.
"We were told red diesel rebate was a tax relief on pollution, but this government has done nothing to incentivise uptake on greener alternative fuels instead choosing to tax them at the same rate of duty.
"I am afraid to say that the consensus in the construction industry is that the removal of red diesel entitlement is simply a tax grab."
The clock is ticking with the legislation removing the red diesel entitlement due to come into force from April 1st and the price of red diesel and white diesel sitting at 122p per litre plus VAT and 143p per litre plus VAT respectively and alternative fuel HVO Green D+ priced at 190p per litre, many businesses in the construction industry are fearing the worst.
