TAX relief over the use of red diesel in farming has been secured after extensive lobbying from the National Farmers’ Union (NFU).

In the budget on March 11, Chancellor Rishi Sunak said while he would “abolish the tax relief for most sectors”, agriculture would keep it for red diesel alongside the rail and fishing industries. This type of diesel can only be used by vehicles not travelling on public highways.

Changes to this duty could have virtually doubled fuel costs for farmers, the NFU said.

The NFU was also pleased to see a commitment on investment in flood prevention, additional funding to tackle fly-tipping and support in the wake of the coronavirus for small businesses.

NFU President Minette Batters had urged Government to keep the lower red diesel rate to allow farm businesses to remain competitive and said the use of the fuel remained “absolutely crucial to farm businesses and maintaining food production”.

During the Budget the Chancellor said it had been a “£2.4 billion tax break” which had “hindered the development of cleaner alternatives”, but it will be two years before it’s implemented.

He added: “I have heard the concerns about agriculture particularly from the NFU, rural colleagues and indeed my right honourable colleague the member for Sherwood, so I have decided that agriculture will retain the relief.”

Cotswold Journal:

Robert Newbery

Robert Newbery, from the NFU, had called for a range of measures to help farm businesses remain viable during the transition away from the European Union.

He said: “On the face of it, this Budget seems positive for West Midlands’ farmers and growers and we will be looking at it in more detail.

“We are pleased about tax relief on red diesel as there has been quite a lot said on this in recent weeks, while we have been busy lobbing Government in the background.

“Changes to this duty could have virtually doubled fuel costs for farmers and, with no current alternative fuel for agricultural vehicles, this would have left farms immediately uncompetitive with many other countries who continue to provide lower fuel duty for their agricultural industries.

“We’re also pleased to see the increase of £5.2 billion into flood defences, particularly the £120 million for the repair of damages caused by this winter’s storms.

“It’s crucial a significant chunk of this is spent on helping repair defences in rural areas.”