§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer what proposals have been made by the European Commission to harmonise the taxation of diesel fuel for transport by all modes; whether that includes marine use at sea, in estuaries, on rivers and canals, for both commercial and leisure use; what consultations have taken place with interested persons or bodies; what reports have been published by the Government; and whether a decision in the Council of Ministers is by two-thirds majority vote. [98476]
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§ John HealeyThe only European Commission proposal for full harmonisation of duty rates for diesel fuel used in transport relates to diesel fuel used by lorries over 16 tonnes, buses and coaches. The proposal is that member states should bring their duty rates for such diesel closer together to reach a harmonised rate by 2010 of[...]350 per 1,000 litres, although that rate would be uprated in line with inflation. The Government have submitted an Explanatory Memorandum on this proposal (reference 11571/02 dated 26 September 2002), which set out our opposition to it. That opposition is shared by nearly all member states, so the directive cannot be adopted in its present form, as any decisions taken by the Council of Ministers on matters of taxation have to be unanimous.
The only European Commission proposal relating to duty on diesel fuel for marine use is the proposed directive on taxation of energy products. This would generally continue the existing duty treatment of diesel fuel for marine use in the mineral oils structures directive. It provides for a compulsory exemption for diesel fuel used for navigation in Community waters (although it would allow member states to limit the exemption to international and intra-Community transport) and for an optional exemption for diesel fuel used for navigation in inland waterways. In both cases, private pleasure craft are excluded from these exemptions, but the United Kingdom's derogation from the existing directive, allowing the United Kingdom to exempt fuel for private pleasure craft until 31 December 2006, will be unaffected. The Government have submitted a supplementary Memorandum on the latest version of the proposal (reference 13422/02, FISC 266, dated 26 November 2002). This directive will support efforts to deal with the significant environmental problems arising from global warming, which requires cross-border action. This proposal also cannot be adopted in its present form without unanimous agreement by the Council of Ministers.