27 March 2020

Ahead of the Spring Budget on 11th March, we had already raised concerns with HM Treasury about a possible change concerning red diesel which had been reported in the press. Our letter welcomed Government’s aim to reduce carbon emissions but raised concerns that removing all access to red diesel could achieve the opposite of its desired effect and negatively impact on the environment and the economy.

The Budget subsequently confirmed that Government will remove “the entitlement to use red diesel except for agriculture, fish farming, rail and non-commercial heating” from April 2022. We remain concerned that the change could result in adverse environmental and economic impacts through a loss of tourism, employment and trade. We welcome the announcement that boaters will still be entitled to use red diesel for heating and cooking, which was one of the concerns we had raised. Government has said it will explore options for how this will work for boats with only one fuel tank.

We will be taking up an offer from HMT, received immediately after the Budget announcement, to be part of discussions on why other sectors should still be allowed to use red diesel. We will attend these meetings to put the case that removing the subsidy completely would have a detrimental effect on commercial craft including the hire boat trade and waterborne freight traffic which represents a small but important contribution to having less lorries on the road. We are passionate about protecting and restoring the country’s 7,000 miles of canals and navigable rivers for the future and know that to do so, we need to make boating more sustainable and affordable, as well as preserving our precious waterways environment and heritage.

The news in the Budget that the Chancellor has committed to at least doubling the funding the commercialisation of innovative clean energy technologies is welcome news, as IWA also wishes to see more research into alternative forms of propulsion so that more boats can move to using cleaner forms of energy in the future.