Elemental
Well-Known Member
When this debacle first broke, I wrote to Chloe Smith (the MP that signed off the Impact Assessment)
I have posted her response in full.
I have posted her response in full.
Thank you for your email of 21 February about changes to legislation covering use of red diesel in private pleasure craft.
I am sorry for the obvious concern this announcement has caused you. First, let me assure you that there is no intention to require boat owners to empty their fuel tanks of red diesel, clean their tanks or for the Government to have any involvement in their decisions to travel to other countries.
This has always been a difficult issue for the UK since losing the derogation from the EU Directive which enabled private pleasure craft owners to use rebated fuel, The UK's status as an island nation with a long coastline means that the issue of fuel supply is more of a Consideration for us than for other Member States. This was the main reason that measures were introduced in 2008 to allow private boat owners to continue to use red diesel, with the requirement that the full rate of duty must be paid on the proportion of fuel used for propulsion. The continued use of red was important because, as you say, there is no supply of ‘white’ diesel at ports and marinas, and to install a second supply stream would be costly for suppliers.
Unfortunately, following a complaint from an individual, the Commission challenged the practice of allowing the use of marked fuel in private boats, saying that it contravened the EU Fiscal Marking Directive, which provides for a common system of fiscal marking for fuel which has not borne full duty. Since the Commission began infringement action, our concern has been to find a solution that benefits the widest range of boating interests. An adverse ruling in the European Courts would mean that the UK would be required to ensure that only White diesel was used in private pleasure craft. Although this outcome might suit those boat owners who travel abroad, the vast majority of boat owners and fuel suppliers would not be in favour of such a solution. In consultation with boating organisations, we have, therefore, decided that the wider interest lies in the retention of the use of red diesel.
Talks between UK officials and the Commission last year resulted in a potential solution which would minimise the risk of an adverse ruling should the Commission proceed with infringement proceedings - and we are now optimistic they will not. The solution is for the UK to limit the use of full duty paid red diesel to UK waters, with users signing a declaration that they were aware they would be subject to the restrictions and prohibitions of other Member States it they entered their waters. This proposal is the basis of the announcement I made to Parliament on 20 February. In addition to securing
the continued use of red diesel for UK boaters, these legal changes will allow most users to continue to benefit from the rebated rate of duty for fuel used for domestic purposes on board their boat.
HMRC published draft legislation on its website on 20 February for consultation until 1st March, after which further changes may be made to ensure that the position is quite clear. The intention is to make it clear to users that the use of red diesel is a UK procedure and other Member States may not allow it in their own waters - rather than to make it illegal to use red diesel outside UK waters. The terms of the legislation and the declaration must meet the Commission‘s concerns as well as making the situation clear for users. It is for this reason that HMRC is consulting on the draft terms, and I am grateful to you for your response. Following the consultation period, further details will be published on HMRC's website (www.hmrc.gov.uk) in a Revenue and Customs Brief before 1 April.
HMRC has continued to involve boating organisations throughout the discussions and they are generally supportive of this measure, seeing it as preferable to the enforced use of White diesel. It is important to emphasise that, in practice, limiting the use of red diesel to UK waters, so making clear that it is a UK procedure, does not change the current position, as pleasure craft travelling to some Member States already run the risk of being fined by their customs authorities. I do understand that, for those boat owners who travel outside UK waters, the difficulty of obtaining supplies of unmarked diesel is a very real problem but this is a commercial issue, and unfortunately not one to which the Government can provide a solution, I do believe, however, that the decisions we have taken represent the best way of protecting the interests of the majority of boat owners, fuel suppliers and others in the leisure boat industry.
I hope this is helpful. Thank you for taking the trouble to make me aware of your concerns.
Chloe Smith
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