John Healey MP, Financial Secretary to the Treasury, reveals his department's thinking on the red diesel issue

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John Healey, the minister responsible for the red diesel decision, says he believes boaters must pay the full tax rate of 48.35p per litre, in order to comply with December’s ruling from the European Commission.

In an exclusive interview with Motor Boats Monthly, Mr Healey said he is “constrained by the law on this issue”.

With Treasury officials still frantically researching the ramifications of the Commission’s decision to end the UK’s red diesel derogation, nothing can be 100% ruled out at this stage. However, it is thought that if boaters are forced to fill up with “white” roadside diesel, this must be taxed at a consistent rate to all users.

Despite this, some experts still believe that a variable rate of tax for red diesel is permitted by the Directive. This leaves alive the possibility that boaters could continue to fill up with red diesel, taxed at the EU minimum rate of around 20p per litre, while fishermen and commercial users either pay a different rate at the pump or receive a rebate at a later date.

Mr Healey addressed the concerns of boaters by saying, “We are aware that this is disappointing for the boating community and we recognise their concerns about the consequences for them. Although we must accept that the derogations will end, it is most important that we now continue to work closely with boating organisations to assess the implications and discuss how we can implement the necessary changes.”

He told MBM that his department “will be exploring the options for the most appropriate implementation in the New Year”, but explained that he would ensure “a suitable transition period”.