Budget ‘backtrack’ on red diesel duty rise welcomed

News that the UK government has stood down on a rumoured increase in red diesel duty for farmers and fishermen was widely welcomed, following Wednesday’s budget announcement.

Following serious concerns over a rumoured “significant” rise, Orkney and Shetland MP Alistair Carmichael has now said he is glad the government “has listened to reason”.

Wednesday saw the chancellor of the exchequer Rishi Sunak announce, in his first budget, that there would be an exemption allowed for agriculture and fishing.

Responding to the original rumours Mr Carmichael has said farmers are already facing uncertainty over future support payments and access to export markets post-Brexit, therefore ending the red diesel lower rate would make it “a triple whammy.”

In a letter sent to the chancellor earlier this week, Mr Carmichael wrote: “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.”

Speaking following Wednesday’s announcement, the Northern Isles MP said: “Today’s backtrack on red diesel duty is a win for farmers, crofters and fishermen in the Northern Isles. Last week I wrote to the chancellor calling on him to think again on this damaging tax hike on our rural industries. I am glad that the government has listened to reason and to the concerns expressed by the NFUS amongst others

“The chancellor does not go far enough in supporting rural business. However, in the face of cuts to farm support payments and future export market uncertainty, we need to give more support to ensure a sustainable and stable agriculture industry.”

The national farmers union in Scotland (NFUS) also took up the issue and lobbied the UK Government.

NFU Scotland President Andrew McCornick said: “It comes as a great relief to farmers and crofters across Scotland that there will be no increase in duty for red diesel for the agriculture industry.

“Having access to affordable red diesel is key to farmers and crofters being able to produce the high-quality raw materials for a successful Scottish food and drinks industry.

“Off the back of a great deal of discussion last week around a possible rise in red diesel duty, NFU Scotland asked its members to contact their MPs to highlight their deep concerns. NFU Scotland’s members answered the call in great numbers and today’s result is testament to the lobbying power we have as a united organisation.

“Away from the red diesel, it is important that NFU Scotland is engaged by the UK Government on its comprehensive spending review which will set out the funding to meet the Conservative Party’s manifesto commitments on funding for the replacement of the CAP and EU structural funds.

“NFU Scotland strongly believes that the spending review should consider the introduction of multiannual financial frameworks for farm support, that will help food producers plan and invest beyond the short to medium term.”

The union president added: “The promised uplift in spending for digital connectivity, including the 5G rollout in the hardest to reach areas of Scotland, is an extremely promising development for many of our very rural members who, more and more, are requiring high-performance broadband for their businesses. Any implementation of this uplift will require a  great of cooperation and communication between the UK Government and the Scottish Government.”