Yachting and Boating World forums: Another response

So I faxed my MP, John Redwood. He replies:

"I have just received the attached from the Treasury Minister, John Healey, which I know you will find disappointing. As we suspected, there is no guarantee that the government intends to continue favourable tax treatment for red diesel past 2006. It is also very worrying that the have already started putting up the tax on this fuel.

I am very sorry I could not send you a more positive reply, but I will continue to monitor the situation.

Yours sincereley

John Redwood"

John Healey, MP writes:

"Dear John,

Thank you for your letter of 23 March to Gordon Brown etc etc. I am replying as Minister responsible.

Mr Wignall asks about the European Commission's plans to disallow the current use of duty free diesel in Britain's narrow boats in the near future. [Note the Minister's masterful grasp of the situation and the question here]

I should explain that private pleasure craft with diesel engines are entitled to use rebated gas oil or red diesel, which is specially marked to distinguish it from diesel used as road fuel. This is diesel which bears a reduced (or rebated) rate if excise duty of 4.22 pence per litre compared with the current 47.10 pence per litre for diesel used on the roads. From 1 September the rebated rate of excise duty will rise to 6.24 pence per ltre compared with 48.52 pence per litre for diesel used on the roads. As well as commercial and privately owned boats, rebated gas oil can also be used in certain off road vehicles such as most agricultural vehicles and machinery, vehicles employed in motorway construction, forestry, mining and quarrying, and diesel locomotives. [Thank you, Minister, I never knew any of that. Perhaps I shall sell the boat and build a motorway instead.]

Under the relevant European agreements (currently the Energy Products Directive, which came into effect on 1 January), fuel used by private pleasure craft on inland waterways is normally taxable at the same rate as the equivalent road fuel. However, the UK enjoys a derogation from this provision that allows private pleasure craft to use red diesel. This derogation is due to expireon 31 December 2006, subject to prior review by the European Council of Ministers, but we will have the opportunity to apply for an extension. I can assure Mr Wignall that Ministers will be considering the position on the UK's derogations in th erun up to 2006.

I hope this helps you respond to Mr Wignall.

John Healey, MP"

I am intrigued by his reference in the last para to inland waterways - is he implying that none of this applies to craft used at sea, only to inland use? Othe rthan that, another whitewash, IMHO. I will be writing to him presently...

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