DUP leader Sir Jeffrey Donaldson urges chancellor Rishi Sunak to cut VAT and duty on fuel

Sir Jeffrey was joined by other party MPs as he delivered a letter to the Treasury yesterday calling for further measures to support those struggling with spiralling fuel and energy costs.

One of his Westminster DUP colleagues Carla Lockhart also challenged the Chancellor to reverse his proposal to abolish the rebate for red diesel.

She said that industries in Northern Ireland such as construction, haulage, waste and generator powered businesses will be financially damaged by the rebate’s abolition.

Chancellor Rishi Sunak is set to deliver his spring statement on Wednesday and has faced pressure to help households with rising living costs.

In his letter to Mr Sunak, the DUP leader said: “You have recognised the impact that the rising cost of living and, in particular, energy bills are having on households right across the United Kingdom.

“Whilst measures announced by the Government are welcome, we do not believe they have gone far enough.

“As Chancellor, you have experience of taking action in response to extraordinary circumstances and will know the huge benefit that support during the pandemic brought to families right across the UK.

“There is a need for further assistance in relation to the cost of living crisis. We encourage you to take action.”

He called on the Chancellor to cut VAT and excise duty on diesel and petrol, pause plans to remove the red diesel rebate, cancel the planned 1.25% increase in national insurance contributions and to offer targeted extra support to working families and those in greatest need with heating costs.

His letter continued: “Northern Ireland is a rural region and depends on road haulage, therefore fuel costs are deeply worrying.

“We believe that such action will be necessary to prevent the current crisis escalating even further.

“It is vital that you not only recognise the scale of the problem we face, but take resolute action to offer hope to millions of people across the UK.”

DUP Upper Bann MP Carla Lockhart who has been leading the party’s campaign at Westminster gainst the removal of the red diesel rebate said several local firms have told her they stand to lose hundreds of thousands of pounds when it is abolished.

“I have been inundated with businesses contacting me concerning this change. Many are concerned about their future viability given the financial impact this along with many other rising costs will have,” Ms Lockhart said.

The DUP MP said one local haulier told her that the cost to his business of the end of the rebate would be in the region of £90,000 yearly.

Meanwhile a quarrying business that made representations to Ms Lockhart said the rebate’s abolition will cost their business around £400,000 per year.

“This is simply a tax grab on the part of the Government given that they have presented no evidence as to their claim that it will improve air quality and help the Government achieve net-zero. Whether vehicles run on red or white diesel the emissions are the same the only difference is the Government get additional taxes,” she said.

Ms Lockhart urged the Chancellor to “draw back from this reckless tax grab” which she believed would end up with rising construction costs that in turn would mean less money available to build roads, hospitals and schools.

She added: “The Chancellor in his Budget speech to the House last year stated; ‘this is what this Budget is about and that is what this Government is about, infrastructure connects our country, drives our productivity levels up.’ He is right, so why make such a key driver in our economy more expensive?

The Government believes that removing the red diesel subsidy will ensure the tax system discourage the use of pollutant fuels and nudge businesses to move to cleaner, greener energy alternatives to run their plant and machinery.

Up until this proposal red diesel was taxed at a lower rate than white diesel in order to support businesses particularly connected to agriculture.

The agricultural sector in Northern Ireland has warned that greener fuel to power enterprises including processing plants is still not available and abolition could cost up to £25 million across per year.