Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to page 19 of the Reforms to the tax treatment of red diesel and other rebated fuels: consultation, what steps his Department plans to take to assess the effect of those reforms on the prices of goods and services that households and voluntary organisations use.

The Chancellor announced at Budget 2020 that the Government will remove the entitlement to use red diesel from April 2022, except in agriculture, fish farming, rail and for non-commercial heating (including domestic heating). The Government recognises that this will be a significant change for some businesses and launched a consultation in July to make sure it has not overlooked any exceptional reasons why other sectors should be allowed to continue to use red diesel beyond April 2022.

To assess the effect of these reforms on the prices of goods and services that households and voluntary organisations use or pay for over the long-term, the Government will draw on a range of relevant evidence. This includes information received from stakeholders as part of the consultation on sectors and organisations' current red diesel consumption and costs, their capacity to shift to alternatives to red diesel, and their capacity to pass through costs down the supply chain or absorb these extra costs.