18.02.2006

A red diesel letter

17 February 2006

RED DIESEL BAN SET TO HIT ACCESS CUSTOMERS

At present, truck-mounted access platforms and mobile cranes are permitted to use red diesel which does not carry such a heavy tax burden as the white diesel used in road-going lorries, buses and cars.

Because they are designed to be primarily used on site, cranes and access platforms are classified along with other construction plant and agricultural vehicles and hence qualify for the cheaper fuel, which is dyed red to discourage its illegal use.

Nationwide Access went to court in 2000 to reverse a decision by HM Customs & Excise to prevent us using red diesel. We won that case, but now the Government has announced plans to ban the use of red diesel in truck-mounted access platforms. The Treasury propose to remove a number of vehicle types from the red diesel category in the 2006 budget, although the operators may be given up to 12 months in which to comply.

Our truck-mounted access platforms only use the public highway when travelling to and from the worksite and as such are not primarily intended for road use. An analysis of our operators working hours during 2005 showed that 90% of their time was spent working on site therefore there is no logical justification for banning the use of red diesel.

White diesel carries an additional Hydrocarbon Duty, which means it costs roughly 65 pence per litre more than red diesel. Our current operated hire rates are calculated with the vehicles running on red diesel and with such a significant increase in costs it is not possible for the hire company to absorb them. It is therefore inevitable that these costs will be passed on to the end-user, which will mean an estimated increase of 20% per hire.

Powered access use has increased rapidly during the past few years, many industries now depend on it and their end products and services are priced with its use included. But this growth hasn’t just been in construction, for example the mobile telecommunications industry spends around £10 million per year on powered access equipment for infrastructure expansion and maintenance. A 20 per cent increase on this is significant – and that is before you look at their use of other plant that could be affected.

With the ever increasing use of 3G mobile phone technology, the coming years will be a busy time for telecommunications infrastructure work, and the mobile providers will simply pass any increase in installation costs straight to their customers - that’s you and me.

However, my greatest fear is not the cost being passed on, but that these cost-hikes could undermine the government’s own safety agenda: If it gets too expensive, people will be tempted to find other ways of working at height, which would undermine everything that The Work at Height Regulations (2005) have done to encourage people to use the most suitable method of access for every job.

Even though steps, ladders and scaffold towers are sometimes cheaper than powered access, many access users from a variety of business sectors are now putting safety before cost. My greatest fear is that the ban on the use of red diesel won’t help to encourage that trend, but it might help to reverse it.

Scott McCall
Marketing Manager
Nationwide Access