Rebated Fuel Rules: Construction Industry

The construction industry is facing challenges such as material scarcity, high costs, and now an impending fuel duty increase. This will affect builders' profit margins, making many projects unviable and leading to a vicious economic cycle. The hon. Member for Upper Bann raised concerns about the crossover between construction and agriculture and highlighted the lack of forethought in these changes. This change could lead to an increase in emissions due to the displacement of local manufacturing advantages, such as in Shetland where polystyrene boxes will need to be transported from the mainland, increasing carbon footprints. Asked if the Minister would give way. Will the Minister tell the House what reduction in emissions will be achieved as a consequence of this measure?

The construction industry is deeply impacted by the removal of red diesel rebate, which was introduced without due consideration. The alternatives to existing vehicles are not available at scale or price point, leading to increased costs and potential displacement of biodiesel use. This will harm business investment and public sector capital spending. Asked if the Minister would give way. Will the Minister give way?

Congratulates Carla Lockhart on securing the debate and highlights that the issue affects not only construction but also mining and quarrying industries, noting there is no alternative to rebated fuel for machinery. Asserted that no alternative equipment is available for quarrying, highlighting the difficulty of pursuing quarrying with battery-powered or electric machines.

Expressed support for reducing the use of diesel but raised concerns about fuel duty on lower-carbon alternatives like hydrotreated vegetable oil and the risk of fuel theft in the construction industry.

Jim Shannon highlighted concerns from Northern Ireland businesses regarding the impact of losing red diesel rebates, which would cost between £20 million and £25 million annually in Northern Ireland alone. He cited examples such as Conexpo, a stone value aggregate producer, and Cooke Brothers, an engineering business involved in shipyards and sewerage works. Shannon stressed that these companies lack viable alternatives to diesel engines for their machinery and generators. Suggested a staging process for new technology implementation and questioned why exemptions were given to farmers but not those relying on generator systems.

There is no argument about the principle of reducing carbon emissions, but there is nothing in the policy paper that outlines a long-term reduction in fossil fuel use. The Exchequer impact sits at around £1.4 billion to £1.5 billion annually. There are concerns over unintended consequences and whether environmental taxes truly measure or monitor their intended impacts. The proposal appears to be about making money rather than reducing fuel use and pollution, with no expected reduction figures provided in the policy paper. I am grateful to the Minister for admitting that the Government do not know what reduction in diesel fuel usage they expect to get from the proposal. I will ask the question another way. The figures in the Government's Budget papers have been cleared by the Office for Budget Responsibility, which will have looked at the assumptions built into them.