8 minute read
campaigns Update
Spotlight on...
RED DIESEL
TRAcEy DAgLEy
Alison Smedley, IWA campaigns & public affairs manager, takes a look at the recent Government announcement about the use of red diesel on boats, and unpacks the Association’s campaigning activities on the subject since 2008
The announcement in the Chancellor’s Budget of 3rd March that Government will retain the use of red diesel for both private and commercial boats is fantastic news for the inland waterways. IWA has lobbied Government about this issue for over ten years and the decision will have been widely welcomed by boat-owners, freight operators, boatyards and boat-based fuel suppliers.
The announcement coincided with the publication of the conclusion of last year’s Treasury consultation. This confirmed that the current arrangement for private boat-owners will continue, where they are able to use red diesel and pay their fuel supplier the difference between the red diesel rate and the white diesel rate on the proportion they intend to use for propulsion.
It was also confirmed that all commercial boat-operating industries will be able to continue to use red diesel, which is great news for increasing inland waterways freight and getting more traffic off the roads.
U-TURN
The decision overturns the announcement from HMRC last July, which stated that privately owned pleasure-craft would not be able to use red diesel from April 2022. A consultation launched at the same time asked for any exceptional reasons why certain sectors should be allowed to continue using it. IWA’s response to that consultation put a compelling case for inland waterways freight and pleasure-craft to continue to use red diesel until such a time as there was widespread distribution and use of biofuels.
Among IWA’s concerns was the impact such a change would have on boatyards, most of which currently only sell red diesel. Faced with the cost of having to install an additional tank to supply white diesel as well as red, it is likely that most boatyards and marinas would have continued to sell only red diesel, particularly those that operate hire-boat fleets or have residential moorings. Consequently, owners of privately owned pleasure-craft needing to refuel their boats with white diesel would have struggled to find a boatyard that sold it. Other concerns were around safety and environmental risks due to the likely use of portable fuel cans and generators.
Boat-owners will welcome this change of plan, along with boatyards and boat-based fuel suppliers who now won’t need to invest in new equipment. IWA is slightly disappointed that Government hasn’t gone further by addressing the tax anomalies that make alternative fuels, such as HVO, more expensive to buy. It does, however, pave the way for IWA to campaign for parity over sustainable fuel taxation in the future without all the unnecessary expense of moving over to white diesel in the meantime.
Background to IWA's campaign about the taxation and use of red diesel
Here is a round-up of some of the key moments during IWA’s successful campaign, which extended more than a decade: ■ Pre 2008 – Boat-owners were able to purchase and use lowertaxed diesel marked with a red dye, otherwise used by the agricultural and construction industries, for pleasure-boating. ■ 2008 – A UK derogation from the Energy Products Directive (which permitted the UK to continue to levy a reduced rate of duty on motor fuel to be used for propulsion in private pleasurecraft) ended. At that time, IWA, RYA and British Marine worked closely with HM Revenue & Customs to achieve a sensible arrangement of self-declaration, whereby boaters were able to decide at the point of purchase what proportion of their diesel consumption would be used solely for propulsion, and what proportion would be used for heating and lighting. ■ 2011 – The European Commission first threatened to open infringement proceedings against the UK Government for not adhering to EU directives on fiscal marking, designed to prevent the improper use of certain petroleum products. HM
Treasury agreed with IWA’s view that the agreement reached in 2008 complied with Directives and responded to the
Commission accordingly.
■ April 2012 – Advice was issued by HMRC concerning the use of red diesel on the Continent and possible action by other countries against any visiting vessels found with marked red diesel in their fuel tanks. At that time HMRC stated that there would be no change to the arrangements for the use of red diesel on inland waters in the UK provided the correct amount of duty had been paid. ■ May 2013 – The UK Government was formally requested by the
EU to amend its legislation to ensure that private pleasure-boats could no longer buy lower-taxed fuel intended for commercial boats. By July HMRC indicated that the UK Government intended to challenge this, a decision welcomed by IWA. ■ July 2014 – The European Commission referred the matter to the European Court of Justice, stating that the UK was “not properly applying European excise rules”. ■ September 2017 – There was confirmation that the
European Commission still intended to take the UK
Government to court over current UK laws that allowed leisure boaters to purchase red diesel. ■ October 2018 – The European Court of Justice announced that it had found against the UK Government over the matter of the continued use of red diesel by leisure boaters in the UK.
In March a statement was made in the Spring 2019 Budget that
HMRC would seek evidence on the impact of the Government’s proposal to comply with this judgment. ■ July 2019 – HMRC announced that private pleasure-craft in the
UK would be prohibited from using red diesel at some date in the future and launched a consultation about the likely timescales required for implementing the change. IWA responded emphasising the impracticalities of the change by highlighting the key concerns around how the change would impact boatyards, fuel suppliers, boat-owners and the environment, and requested the longest possible period for transition. ■ August 2019 – IWA met with HMRC, along with RYA and other key coastal and inland waterways interests, to reiterate concerns that the ban on the sale of red diesel for propulsion of private pleasure-craft would bring, especially if it were to be rushed through. ■ November 2019 – HMRC announced that it had lost its defence against the EU Court of Justice. Representatives from the boating community and boating industry, including IWA, met with HMRC officials to discuss the implications of the Court’s decision and to help evaluate the UK’s response. ■ February 2020 – Following reports in the press, at IWA’s request the All Party Parliamentary Group for the Waterways raised concerns with HM Treasury welcoming Government’s aim to reduce carbon emissions but noting that removing all access to red diesel could achieve the opposite of its desired effect and negatively impact on the environment and the economy. ■ March 2020 – The Chancellor announced in the Spring
Budget that Government would remove “the entitlement to use red diesel except for agriculture, fish farming, rail and non-commercial heating” from April 2022. IWA again raised its concerns that the change could result in adverse environmental and economic impacts through a loss of tourism, employment and trade. Discussions were held with
HMT on why the inland waterways should be included in the sectors still allowed to use red diesel. ■ July 2020 – HMRC published the outcome of its 2019 consultation, which confirmed that privately owned pleasurecraft would not be able to use red diesel from April 2022. At the same time a new HMT consultation was launched. IWA and other waterway organisations continued to liaise with HMT and
HMRC to make the case for the inland waterways being included in the sectors which would still be allowed to use red diesel. ■ September 2020 – IWA submitted its response to HMT’s consultation on removing access to red diesel for propulsion on the inland waterways from April 2022. In line with its work on sustainable propulsion, IWA’s view was that increased use of biofuels would be more effective in the longer term in reducing emissions, and that red diesel should therefore be retained until there was wider distribution and use of biofuels. ■ March 2021 – The Chancellor’s Budget of 3rd March announced that Government will retain the use of red diesel for both private and commercial boats. This marks the successful conclusion of more than ten years’ work by IWA, and the start of a new campaign to lobby Government about tax breaks to ensure that biofuels are widely available at a competitive price to secure a more sustainable future for the inland waterways.
Branch campaigning
Uttoxeter Canal restoration threatened by planning application
IWA North Staffordshire & South Cheshire Branch have been mobilising supporters to help Caldon & Uttoxeter Canals Trust in fighting the proposals for houses next to the current terminus of the Caldon Canal. A planning application for 49 homes at Froghall would scupper any chances of the Uttoxeter Canal ever being restored.
If the development goes ahead with the proposed layout, an access road and houses would be built on the line of the canal and all possible alignments for its future restoration would be blocked. The proposal contravenes both the Churnet Valley Masterplan and the recently adopted Staffordshire Moorlands Local Plan. Both policies support restoration of the canal as a long-term opportunity, with a pedestrian route from the canal basin to the A52, along the original towpath, as a short-term goal.
Branch volunteers sought the advice of IWA’s Planning Advisory Panel and Restoration Hub to assist with drawing up a detailed objection to the planning application, which is due to be considered by Staffordshire Moorlands District Council’s planning committee in April. Other objectors to the planning application include many Waterway Recovery Group volunteers who have worked on the Uttoxeter Canal in recent years, as well as boaters who have enjoyed the Caldon Canal and wish to see the possibility of the Uttoxeter Canal being restored in the future.
