Red diesel ban in construction April 2022

[BFG TERRANO]

The chancellor has announced that red diesel (duty rebated heavily) can’t be used from April next year on construction sites. This is a huge blow financially and theft risk with building sites and construction projects across the country having tanks of road legal diesel on sites…

[LaurasOtherHalf]

This isn't new news though is it?

[BFG TERRANO]

LaurasOtherHalf said:

This isn't new news though is it?

Not new news I agree. But realisation is setting in and concerns becoming a reality. Basically we’re helping pay back the furlough money. Costs will be passed on to a degree but house prices are what they are. Smaller builders and hire companies will struggle in an already competitive market

[LaurasOtherHalf]

BFG TERRANO said:

LaurasOtherHalf said:

This isn't new news though is it?

Not new news I agree. But realisation is setting in and concerns becoming a reality. Basically we’re helping pay back the furlough money. Costs will be passed on to a degree but house prices are what they are. Smaller builders and hire companies will struggle in an already competitive market

Tell me about it, I'm at second lift on my new build and the prices are ridiculous. Our industry won't be the only ones helping pay back everything the gov has spent but we'll need to work with what we've got.

I do agree it's daft the construction industry is being singled out, if I look at my diesel costs per unit it really isn't that much however.

[anonymous-user]

Do those in the affected industries envisage the development of plant kit powered by alternatives, compressed natural gas or LPG for example, or is it expected that the extra costs will just be soaked up?

Edited due to my abysmal English!

Edited by anonymous-user on Wednesday 11th August 08:53

[BFG TERRANO]

Southerner said:

Does those in the affected industries envisage the development of plant kit powered by alternatives, compressed natural gas or LPG for example, or is it expected that the extra costs will just be soaked up?

At this moment we’re just expected to absorb this cost. Last year our company cost for red was £4M, I’m part of a national developer, this will more than double plus possibly theft on top. Also investment in high security tanks or regular smaller deliveries- all come at a cost. The construction industry is one of few that have been able to work and keep the economy moving for the last year and this is the thanks we get!

As for alternative fuel sources it’s just not out there yet no matter what the cost. We’re using 2 JCB 14mtr tele handlers for 9 hours a day flat out. There’s no battery or lpg replacement for that. I have colleagues in Wales trialing battery plant… all of which charged overnight via a diesel generator running red of course

[anonymous-user]

That's pretty bleak

CNG (gas) has been a well established diesel replacement in bus fleets for a few decades now; it's a PITA to store in bus depots but for construction plant I guess it'd be easy enough to deliver in a modular tanker off the back of a container lorry, so perhaps some enterprising outfit will explore the oppprtunity. Utter shambles though.

[LaurasOtherHalf]

BFG TERRANO said:

At this moment we’re just expected to absorb this cost. Last year our company cost for red was £4M, I’m part of a national developer

Big numbers but what were your national developers pre-tax profit margins in the same period?

[anonymous-user]

LaurasOtherHalf said:

BFG TERRANO said:

At this moment we’re just expected to absorb this cost. Last year our company cost for red was £4M, I’m part of a national developer

Big numbers but what were your national developers pre-tax profit margins in the same period?

That equation of course doesn't translate quite as nicely to the many hundreds/thousands of smaller firms who'll be hit very hard by this

[LaurasOtherHalf]

Southerner said:

LaurasOtherHalf said:

BFG TERRANO said:

At this moment we’re just expected to absorb this cost. Last year our company cost for red was £4M, I’m part of a national developer

Big numbers but what were your national developers pre-tax profit margins in the same period?

That equation of course doesn't translate quite as nicely to the many hundreds/thousands of smaller firms who'll be hit very hard by this

As I said above, I'm one of them.

[anonymous-user]

BFG TERRANO said:

LaurasOtherHalf said:

This isn't new news though is it?

Not new news I agree. But realisation is setting in and concerns becoming a reality. Basically we’re helping pay back the furlough money. Costs will be passed on to a degree but house prices are what they are. Smaller builders and hire companies will struggle in an already competitive market

Barratt furloughed 5500 of its staff over the pandemic. Should they be exempt from helping to pay back/contribute?

[Networkgeek]

Southerner said:

That's pretty bleak

CNG (gas) has been a well established diesel replacement in bus fleets for a few decades now; it's a PITA to store in bus depots but for construction plant I guess it'd be easy enough to deliver in a modular tanker off the back of a container lorry, so perhaps some enterprising outfit will explore the oppprtunity. Utter shambles though.

Would the vehicle need any special modifications to run on CNG?

[InitialDave]

Southerner said:

Do those in the affected industries envisage the development of plant kit powered by alternatives, compressed natural gas or LPG for example

[SuperPav]

Sorry, this isn't one I can get too worked up about. I appreciate the "where do you draw the line" argument, but the money payback has to come from somewhere and this is a relatively uncontroversial one.

I've been hit by rising costs in the industry first hand too. The impact of diesel duty on small builders/developers is negligible compared to the double digit percentage rises in much more significant components of the cost base (materials, timber, labour). The diesel cost obviously won't help and will be another inflationary pressure, but rem ember that (a large part of) the construction/housing industry is one of few industries that will see an upside during an inflation period due to rising house/land prices.

[BFG TERRANO]

Southerner said:

LaurasOtherHalf said:

BFG TERRANO said:

At this moment we’re just expected to absorb this cost. Last year our company cost for red was £4M, I’m part of a national developer

Big numbers but what were your national developers pre-tax profit margins in the same period?

That equation of course doesn't translate quite as nicely to the many hundreds/thousands of smaller firms who'll be hit very hard by this

And there’s the problem. The smaller fish won’t compete

[BFG TERRANO]

MDMA . said:

BFG TERRANO said:

LaurasOtherHalf said:

This isn't new news though is it?

Not new news I agree. But realisation is setting in and concerns becoming a reality. Basically we’re helping pay back the furlough money. Costs will be passed on to a degree but house prices are what they are. Smaller builders and hire companies will struggle in an already competitive market

Barratt furloughed 5500 of its staff over the pandemic. Should they be exempt from helping to pay back/contribute?

No national developer used furlough from the government. Staff were paid in full by the company to avoid bad press. “Cash rich builders go cap in hand to government “ wouldn’t read well. The big builders that did shut down were shut by choice and respect for the situation not because they were told to. Many kept working throughout the pandemic so far as the material chain would allow

[LaurasOtherHalf]

BFG TERRANO said:

Southerner said:

LaurasOtherHalf said:

BFG TERRANO said:

At this moment we’re just expected to absorb this cost. Last year our company cost for red was £4M, I’m part of a national developer

Big numbers but what were your national developers pre-tax profit margins in the same period?

That equation of course doesn't translate quite as nicely to the many hundreds/thousands of smaller firms who'll be hit very hard by this

And there’s the problem. The smaller fish won’t compete

That doesn't make sense and isn't how the free market works. I'm exactly the person you're talking about, a small one off builder doing a house every 18 months. The tax rise will cost me around £0.5k per unit going off my spread sheets.

It's not going to put any SME builders or hirers out of business, the tax cost will simply be passed onto the customer in either case.

[snotrag]

SuperPav said:

Sorry, this isn't one I can get too worked up about...


.... but rem ember that (a large part of) the construction/housing industry is one of few industries that will see an upside during an inflation period due to rising house/land prices.

Key one for me this. Certainly around here, developers cannot build houses quick enough (and their charge for doing so is going up and up with no sign of demand slowing). I know this as I bought one mid-pandemic.

Whatever tax increase appear (and there will be plenty more), there will ALWAYS be someone who's not happy, anyone can understand that. But I dont think this is particularly one which I think many will see as very unfair.

[anonymous-user]

BFG TERRANO said:

MDMA . said:

BFG TERRANO said:

LaurasOtherHalf said:

This isn't new news though is it?

Not new news I agree. But realisation is setting in and concerns becoming a reality. Basically we’re helping pay back the furlough money. Costs will be passed on to a degree but house prices are what they are. Smaller builders and hire companies will struggle in an already competitive market

Barratt furloughed 5500 of its staff over the pandemic. Should they be exempt from helping to pay back/contribute?

No national developer used furlough from the government. Staff were paid in full by the company to avoid bad press. “Cash rich builders go cap in hand to government “ wouldn’t read well. The big builders that did shut down were shut by choice and respect for the situation not because they were told to. Many kept working throughout the pandemic so far as the material chain would allow

Really? One would suggest to do a little reading.

https://www.insidehousing.co.uk/news/news/uks-bigg...

https://www.thisismoney.co.uk/money/markets/articl...

Edited by anonymous-user on Wednesday 11th August 10:08

[anonymous-user]

Networkgeek said:

Southerner said:

That's pretty bleak

CNG (gas) has been a well established diesel replacement in bus fleets for a few decades now; it's a PITA to store in bus depots but for construction plant I guess it'd be easy enough to deliver in a modular tanker off the back of a container lorry, so perhaps some enterprising outfit will explore the oppprtunity. Utter shambles though.

Would the vehicle need any special modifications to run on CNG?

The buses are usually purpose built, but I believe it's essentially a standard diesel engine with modified head and fuel lines. Probably not a DIY job, but I see no reason why it couldn't become well established for heavy plant.