What we're campaigning for - and why

 

Historically, leisure boaters in the UK have had permission to use red diesel, which is taxed at a lower rate than its roadside equivalent. Coloured with red dye to distinguish it from its more expensive cousin, red diesel is typically available for around 40p/litre – as aginst the 92p national average for diesel on the forecourt.

These days, however, our permission to use red diesel is subject not only to national approval, but also the EU’s. That’s because the EU has regulations in place to ensure a harmonisation of tax rates on fuels and energy products – and our permission to use red diesel rests on an exemption (or ‘derogation’) from the EU regulations.

So far so good, except that the current derogation ends on 31 December 2006. Following that date, we will be forced to fill up with high-tax diesel which, coupled with the costs of supplying diesel to marine fuel berths, would push the price well above £1 per litre.

But why shouldn’t boaters pay the same tax?

The principal arguments are economic, although there are others. In a survey conducted by the RYA, 54% of recreational boatowners – including 72% of motorcruiser owners – said that they ‘would or may’ have to give up boating altogether, if the price of red diesel rose dramatically.

That’s not just a problem for people who can no longer afford to enjoy their hobby. The UK’s boating industry is one of this country’s great success stories, boasting a turnover of more than £2bn and adding £700m to the UK economy.

And the irony is that even a small loss in revenue to the Government due to reduced participation in boating would easily cancel out the financial benefits of taxing red diesel at a higher rate.

Our partners in the red diesel campaign, including the Royal Yachting Association, British Marine Federation and Inland Waterways Association, have put together an excellent document summarising the situation. You can read it here:

Seeing Red document