NI construction firms face spiralling costs due to red diesel ban

Changes to the law on using red diesel will lead to a spike in costs for construction firms, an MLA has warned.

Currently red diesel is used in machinery such as diggers and dumpers on construction sites but this is all about to change.

New legislation due to come into force will mean red diesel can only be permitted when the vehicle is being used for the purpose of agriculture.

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Newry and Armagh DUP Assemblyman and DAERA Committee member William Irwin MLA said the red diesel rule changes, whilst not severely impacting farming processes, will have an impact economically across many sectors, including hugely popular charity tractor runs.

William Irwin MLA

“The wider economic implications will be felt on sector who have enjoyed the capacity of using lower cost red diesel in machinery such as diggers and dumpers on construction sites. This will have an impact and all at a time when construction material costs are eye wateringly expensive. There simply must be a pause on this process and an urgent rethink on the real and concerning ramifications of the proposed changes.”

Mr Irwin said the fact that in response to a recent UFU and HMRC webinar, government revenue officials stated that charity tractor runs and ploughing matches would ‘not’ be considered exempt from having to use white diesel, showed where the anomalies will exist and urged again for a rethink on the policy generally.

Mr Irwin said, “Whilst agriculture is being considered as an exemption generally from the proposed red diesel rebate rule changes, there will still be wider ramifications across the economy and it simply isn’t in my view a good time to be changing the rules on fuel rebates. The obvious reason being that we are coming out of a worldwide pandemic that has had massive implications, not only on health but also the economy.”

He continued, “Indeed the administration and enforcement of the proposed rules appears to me to be a total minefield and when you learn that a charity tractor run or an annual ploughing match will have to be participated in using white diesel under the new rules, it is easy to see just how unworkable this whole situation will be.”

Mr Irwin said: “The area of charity tractor runs is a huge implication for organisers and if not exempted would have a very detrimental impact on charity fund raising work which is so well supported by the rural and farming community.

“The reality of the rule changes means participants in the tractor run would have to drain fuel tanks of red diesel and refill with white diesel and then do the opposite on completion of the event, that is simply not practical to do and makes no common sense whatsoever.

“I have raised this issue with the Treasury directly and I await a full response to what are very concerning ramifications around this rebate change.”