Orkney and Shetland MP, Alistair Carmichael, has written to the Chancellor to ask for clarification over concerns that this week’s Budget will raise duty rates on red diesel, impacting farmers, crofters and other industries. Red diesel is used in tractors, bulldozers, forklifts, cranes, combine harvesters and generators. The fuel attracts a duty of 11.1p a litre compared with 57.7p for standard diesel used by motorists and hauliers.
Commenting, Mr Carmichael said:
“Rumours abound that the Treasury is planning to abolish the red diesel concession for farmers and Crofters. If these turn out to be true then it could push many farm businesses over the edge.
"Coming on the back of reports last weekend that Government advisors believe that the U.K. does not need agriculture this is another source of worry.
"Farmers already face uncertainty over future support payments and access to export markets post-Brexit. Ending the red diesel lower rate would make it a triple whammy."
Text of Mr Carmichael’s letter to the Chancellor:
In advance of the forthcoming Budget, I am writing in relation to media reports regarding the future of duty on red diesel. I would appreciate your urgent response.
As you will be aware, red diesel is an essential fuel for agricultural machinery. A significant increase in duty on red diesel would have a serious negative impact on farmers and crofters across the United Kingdom, tightening margins and risking putting many farms out of business.
Farmers have made great efforts to mitigate their carbon footprint in recent years. There are, however, currently no other alternatives to diesel fuel for farm machinery. Were there such alternatives and Government support was given for farmers to transition to new machinery, I am certain that significant change would be possible. In the absence of this, I am concerned that the impact of a steep increase in red diesel duty would only be to jeopardise farmers’ livelihoods, with no appreciable benefit to the Government’s climate change goals.
There is considerable uncertainty within the agriculture sector currently, as planned reductions to farm payments and questions over future access to export markets risk undermining confidence in the long-term prosperity of our vital rural economy.
The past week has also seen reports of senior advisors questioning the importance of agriculture as a part of the economy, heightening concerns amongst farmers that the Government intends to prioritise the interests of major cities over rural communities.
In light of the above, I would appreciate your clarification on the Government’s position on the future of the duty on red diesel. I am certain that this information would be of great interest to farmers and crofters in my constituency and across the country.