Quarries slam 57% tax rise on red diesel

The quarrying industry breathed a sigh of relief as the Chancellor announced in the Budget that the rate of the Aggregates Levy would be frozen this year.
However, concerns have been expressed over a 57% increase in duty on off-road plant diesel.
Bob Durward, director of the British Aggregates Association (BAA), told CJ: "Off-road plant diesel is used by things such as loading shovels, dump trucks, mobile plant, generators, cement mixers and fork lifts. It is commonly referred to as 'red diesel' as it contains a red dye to prevent people using it as road fuel, which carries a much higher rate of duty.
"The present rate of duty on red diesel is 4.42p per litre (ppl), but the Chancellor has increased the rate to 6.64ppl, which represents a 57% increase in duty," he said. "The quarrying industry uses a substantial amount of red diesel, so this will impact on us when it comes into effect on 1 September."
The Quarry Products Association (QPA) echoed the BAA's concerns, and warned that it isn't just the quarrying industry that will be affected by the increase in red diesel - the whole of the construction industry will be hit .
"Anyone who uses red diesel will see a significant increase in fuel costs," QPA economist Jerry McLaughlin said.
He also pointed out an error in the Budget. In the text of the section on the Aggregates Levy, it states: "Early indications are that the Levy is achieving its objectives. The production of
virgin aggregate has decreased by 5.7% between 2001 and 2002."
McLaughlin said: "If the government was on the ball, it would realise that the Aggregates Levy didn't actually come into effect until April 2002. So how could the Levy have helped decrease aggregate production by 5.7% between 2001 and 2002? I think it shows a certain lack of care."
The Construction Products Association broadly welcomed the Budget, but felt the Chancellor missed an opportunity to respond more positively to the increasing focus on sustainable building by "only making an extremely modest extension to the range of energy efficient products entitled to a lower rate of VAT".