Red diesel rate hike harmful to business and will not help environmental ambitions

Wednesday 11 March 2020

In response to the government’s Budget announcement today (11 March 2020) to increase the tax rate on rebated (‘red’) diesel in two years' time, Christopher Snelling, Head of UK Policy at FTA comments:

“As the business organisation representing the logistics sector, FTA is urging government to reconsider its decision to increase the tax rate on red diesel as this will be very damaging to the businesses that rely on the fuel to keep vital products and services moving across the country when it comes into force. This move will not incentivise companies to transition to newer, cleaner diesel units, because they are no more fuel efficient; if anything, it will slow progress as companies will balance the increased running costs by keeping their current equipment longer.” 

While newer diesel equipment produces substantially lower local air quality emissions, this is achieved by cleaning the exhaust before emission, not through reduced fuel use.

Snelling added “We are currently working with governmental departments to assess how to accelerate progression to cleaner units, but instead of waiting for this solution, we believe the government is taking this blunt, ineffective and costly action to give the appearance of progress, without regard to the realities of the use of these units.

Prior to the announcement, FTA wrote to the Chancellor of the Exchequer, Rishi Sunak, to urge him to reconsider implementing this policy decision."

Efficient logistics is vital to keep the UK trading, directly having an impact on more than seven million people employed in the making, selling and moving of goods. With Brexit, new technology and other disruptive forces driving change in the way goods move across borders and through the supply chain, logistics has never been more important to UK plc. FTA is one of the biggest business groups in the UK, supporting, shaping and standing up for safe and efficient logistics. We are the only business group in the UK that represents all of logistics, with members from the road, rail, sea and air industries, as well as the buyers of freight services such as retailers and manufacturers whose businesses depend on the efficient movement of goods.