Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment of the impact of the removal of the red diesel fuel entitlement and rising costs of fuel on small businesses; and if he will make it his policy to reinstate the entitlement for landscaping contractors.

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 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, including the landscaping industry, the Government did not believe that they were compelling enough to outweigh the need to ensure fairness between the different users of diesel fuels and the Government’s long-term environmental objectives.

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.