Asked by: Baroness Mallalieu (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what plans they have, if any, to review the prohibition of the use of red diesel for off-road purposes in relation to the equine industry.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
The Government confirmed at Spring Budget 2021 that it would remove the entitlement to use red diesel from most sectors from April 2022.
The Government recognised that this would be a significant change for some businesses and ran a consultation to gather information from affected users on the expected impact of these tax changes and make sure it had not overlooked any exceptional reasons why other sectors should be allowed to continue to use red diesel beyond April 2022.
Having assessed the cases made by other sectors to retain their red diesel entitlement, the Government did not believe that they were compelling enough to outweigh the need to ensure fairness between the different users of diesel fuels, the Government’s long-term environmental objectives and the need for the tax system to incentivise the development of greener alternatives to polluting fuels.
In response to high fuel prices, the Government announced a temporary 12-month cut to the duty on petrol and diesel of 5p per litre and an equivalent percentage cut on the rates for rebated fuels. Overall, this is a tax cut for consumers, including small businesses, worth around £2.4 billion in 2022-23.
As with all taxes, the Government keeps the red diesel entitlement under review.