The EU Commission rejects low duty diesel argument, so now what?
In answer to a parliamentary question on Thursday, John Healey, the Financial Secretary to the Treasury confirmed that the European Commission had rejected the UK government’s application to continue allowing private boats to use low duty red diesel. The outcome isn’t a surprise but it’s a huge disappointment — even to yachtsmen, who use relatively small amounts of diesel. Politically and bureaucratically, many people believe it’s the thin end of the wedge and argue that, as with all taxes affecting UK citizens, the EU should have been told to sod off.
After whatever unsuccessful horse-trading there has been, there is now some flannel about making further representations. In reality, though, the next decision the government is likely to have to make is where to peg the level of duty. The European minimum is 20p a litre (an increase of about 12p a litre over red diesel), compared with the roadside duty of 49p a litre.
What are the odds on a long-term concession on roadside prices? My guess is, pretty long. The recent Stern Review has fuelled the environmental agenda – excuse the pun. ‘Gas-guzzlers’ are becoming unfashionable. What will politicians make of tax breaks for leisure boaters (rich people) and their craft (second homes) that can use (guzzle) up to four or five litres of fuel a mile? The RYA and the BMF have probably only fought round one.
More in the next issue of Yachting World.
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