White diesel to be required for railway use ?

[whole diary]

[broadgage]

I have heard a rumour that the coming budget will include a requirement for railways to use the more expensive fully taxed white diesel fuel, rather than the cheaper and less taxed red diesel used at present.

Is anyone able to confirm or deny ?

If there is any truth in the rumour, I suspect that it might be a long term plan, rather than starting in the next budget.

EDIT TO ADD^▸ (Automatic Dropping Device), now confirmed to be untrue. See later posts made on budget day for details.

[Electric train]

I have heard a rumour that the coming budget will include a requirement for railways to use the more expensive fully taxed white diesel fuel, rather than the cheaper and less taxed red diesel used at present.

Is anyone able to confirm or deny ?

If there is any truth in the rumour, I suspect that it might be a long term plan, rather than starting in the next budget.

If the Government do it too quickly a number of ToC may hand their contracts back unless they can put the fares up to cover the additional cost.  Electricity used for traction power also has special tax exemptions could this be at risk as well

[Robin Summerhill]

Could you possibly tell us where you heard this rumour? From somebody who ought to know about such things or a geezer down the pub?

My first thought when I read it was that it was a Press Release that had breached its 1st April embargo, but I suppose we'll find out for certain when someone goes through the small print of the forthcoming Finance Bill.

[Celestial]

Could you possibly tell us where you heard this rumour? From somebody who ought to know about such things or a geezer down the pub?

My first thought when I read it was that it was a Press Release that had breached its 1st April embargo, but I suppose we'll find out for certain when someone goes through the small print of the forthcoming Finance Bill.

It's behind a paywall of course, but The Times reported the rumour a few days ago, so maybe slightly more believable than from someone down the pub.

https://www.thetimes.co.uk/article/rishi-sunak-budget-chancellor-to-cut-red-diesel-subsidy-s68t3jvjc

Rishi Sunak is expected to cut subsidies for a type of diesel used by off-road vehicles and machinery as he backs away from ending the freeze for fuel duty paid by motorists.

[broadgage]

I heard the rumour from two sources that are independent of each other, so far as I know.
One was a train driver who works for a UK^▸ (United Kingdom) freight company.
The other was an employee at a major fuel distributor.

[infoman]

Have this awful picture of a cross country train being "pulled over" at Yatton loop for their diesel tanks to be "dipped."

Electrification won't cause this problem.

[Celestial]

Re electrification freight operators are likely to be hit badly.

Unlike passenger operators who will (likely) be able to renegotiate the terms of their franchises with the government to cover the loss, freight operators won't. So, you say, a good incentive to use electric traction where possible, and not run diesel services under the wires. Well, yes, but the east coast line doesn't have enough power in the north for all the passenger trains yet, with some bi modes having to run diesel under the wires.  And the power upgrade that is being put in place will only cater for passenger services, so freight will still be left wanting.

[broadgage]

If red diesel was found, would the passengers be left at the trackside and the train taken away to be crushed ?

[johnneyw]

If red diesel was found, would the passengers be left at the trackside and the train taken away to be crushed ?

Better than the other way round! 😯

[Oxonhutch]

Better than the other way round! 😯

That could describe most people's commute in the LTV^▸ (London [and] Thames Valley) area at the moment. 

[Robin Summerhill]

I am surprised that this thread has engendered so much debate, because if you read the quote from the Times carefully it says nothing about the railway being forced to use "white" diesel. Here is the quote again (without the colour so my poor eyesight can read it!:

https://www.thetimes.co.uk/article/rishi-sunak-budget-chancellor-to-cut-red-diesel-subsidy-s68t3jvjc

Rishi Sunak is expected to cut subsidies for a type of diesel used by off-road vehicles and machinery as he backs away from ending the freeze for fuel duty paid by motorists.

First, a pedantic point but an imprtant one. Red diesel is not "subsidised." When something is subsidised it means that the cost of producing it is greater than the price received for it. Red diesel costs less to produce than its selling price so it is not subsidised - it is just not subject to the punitive rates of taxation that the stuff that we pur into our cars is.

So from that we can deduce that the man at no.11 might have his eye on increasing the tax on red diesel, and if that goes up by a penny or two a litre then I can't see there's going to be much fuss made about it by anyone who is currently permitted to use the stuff.

Thirdly, and most importantly, nothing that anyone has posted so far has confirmed the original "rumour" which was:

I have heard a rumour that the coming budget will include a Cl fuel, rather than the cheaper and less taxed red diesel used at present.

Where have we read that "the coming budget will include a requirement for railways to use the more expensive fully taxed white diesel fuel, rather than the cheaper and less taxed red diesel used at present?" We haven't.

Methinks people are adding 2 and 2 here and getting 87...

[broadgage]

I did state that it was a rumour, and not a confirmed factual report. I was unaware of the report in the Times when I posted this.

[stuving]

What that Times article said, specifically, was:

"However, only farmers will be entitled to use the fuel [red diesel] under provisions being finalised for the budget on March 11. Mr. Sunak will justify ending the subsidy for hauliers, who use if for refrigeration units, and the construction industry, saying the measure is needed to improve urban air quality.

...The Treasury first consulted on restricting entitlement to red diesel in 2017, but Philip Hammond backed away from scaling it down. "

So I guess that's the source of the rumour, though that doesn't mention railways per se - and neither do the gov.uk pages on this, which are not much use as a guide. However, that 2017 call for evidence make quite a good fact sheet, if you want one. Obviously there is more background to this than I for one realised (having missed that 2017 announcement, and the 2018 follow-up - the result of which is still awaited).

A complete switch away from red diesel is one possible result of such a review, but obviously it isn't the only option. Perhaps the budget will include something like this:

The current system of taxes on petroleum fuels grew up with two main objectives. Road vehicles pay a high rate, as a proxy for a road usage tax roughly proportional to milage and vehicle weight. Other users pay a low rate, apart from a few industries felt to be in need of help that get exemptions. Air quality, and reducing fossil fuel use so as to reduce climate change, were not considered in setting these taxes, and it is time to start doing that.

The higher tax on road vehicles does, in fact, provide a strong incentive to switch to electric vehicles. It does not need to be increased at the moment, as the reduction of electric vehicle prices (even if partly offset by a reduction of purchase subsidies) is already widening this gap. For other uses, we need to increase the duty paid so as to provide a similar incentive to switch. The size and speed of such an increase will chosen according to the circumstances of each user group or industry.

And perhaps we will get the result of the 2018 consultation? This (originally meant to inform the October 2018 budget) was entitled "Call for Evidence: Non-road mobile machinery and red diesel - excluding use for agriculture, fishing vessels, home heating and static generators". It primarily asks for details on what red diesel is used for, saying that the government doesn't collect such data. It says almost nothing about railways' use, but perhaps they reckon they do have these data available already. The stated motivation was, as suggested by the Times, improving air quality rather than climate change - which is not mentioned once (apart from a keyword on the web page). 

[Robin Summerhill]

A good post there from Stuving, and a salutory lesson for us all in why not to get our knickers in a twist on either side of an argument based on rumour alone 

But a few points spring to mind which I hope our learned friends in the Treasury will take into account:

1.Making hauliers pay more for their fuel when being used for refrigeration may be a sinhularly unwise thing to do until we are absolutely certain that there will not be gridlock at the ports following our departure from the EU^» (European Union - about)

2. Diesel powered trains to not generally sit around in traffic jams like road transport does, so their pollution rating should be lower anyway (except under the footbridge at Manchester Victoria where that remark most certainly does not apply...)

3. Given the amount of subsidy that railways already effectively get from the Treasury in one form or another, increasing the price of their fuel may result in little more than a "money switching pockets" exercise in the Treasury.

[grahame]

I have heard a rumour that the coming budget will include a requirement for railways to use the more expensive fully taxed white diesel fuel, rather than the cheaper and less taxed red diesel used at present.

Is anyone able to confirm or deny ?

If there is any truth in the rumour, I suspect that it might be a long term plan, rather than starting in the next budget.

From the BBC^» (British Broadcasting Corporation - home page) after the budget:

Subsidies for fuel used in off-road vehicles - known as red diesel - will be scrapped "for most sectors" in two years' time

Red diesel subsidies will remain for farmers and rail operators

You saw smoke ... but not quite from the fire that you thought.