C N K Parkinson Esq
Treasury and Resources
Sir Charles Frossard House
PO Box 43, La Charroterie
St Peter Port
28 June 2010
Our Ref: CB
Excise Duty Marine Fuels
I refer to your letter dated 26 April and having collated responses from both private and commercial Chamber members who are involved in the Island marine industry, our response is that all marine vessels should be duty free. There are many reasons for this conclusion and in no particular order they are as follows:
- All fishing and commercial vessels should remain exempt – this is how it is in the rest of the world (more or less).
- If non commercial vessels are taxed further this will lead to a significant decline in both boat ownership and usage.
- Any decline in boat ownership and usage will have a significant knock-on effect on the island marine industry which currently contributes 1.75% of Guernsey’s GDP ie £30m. Commerce and Employment are keen that the island has a diverse economy. The marine industry broadens this and employs people who do not wish to go into the finance industry.
- Guernsey must retain the competitive edge over both Jersey and France. Both jurisdictions are actively promoting their boating industries and if fuel charges were to become more expensive here leisure vessels will by-pass Guernsey and go elsewhere with the inevitable loss of income to the local bar, restaurant, shop, chandlery, boat repairer etc industries.
- Currently there are two fuel importers and four marine fuel outlets where fuel can be purchased – if there is a reduction of trade it is likely one importer will close and the other will then have the monopoly. The fishing industry is particularly concerned that if fuel prices increase this may have an effect on availability of supplies.
- Guernsey currently has an excellent reputation for attracting and welcoming visitor boats ie the overall package is highly prized. Our position must not be sabotaged especially as Jersey and France have plans to grow this leg of their economies.
Fiscal reasons why all fuel should be duty free.
If duty is put on a leisure vessel people will ask themselves whether or not they can justify having a boat. Many will either use their boats less frequently or cease this activity altogether. In turn this will lead to a reduction in income from mooring fees and those who keep their vessels will fill their tanks up in Jersey or France. Fewer visitor boats in the island will lead to the visitor economy and the local boat yard industry being damaged resulting in a lower tax and social security take. It is estimated that visitor numbers could be reduced by 40% and that there would be a significant reduction in local leisure boat ownership and use. Aesthetically, this will have a visual impact on St Peter Port harbour. It is known that visiting boat owners do business in Guernsey. All fiscal arguments point to no duty to avoid significant damage being caused to the local industry and island leisure activities as, if duty is applied, this would have a net negative impact economically.
Social reasons why all fuel should be duty free
The boating world is an integral part of island life; we are an island after all. Guernsey has world class places for both local and visiting boats to visit ie the South Coast and other Bailiwick Islands who would also suffer economically from a reduction in visiting boat numbers. We must not jeopardise our competitive edge when we have such exceptional destinations to attract boaters.
Environmental reasons why all fuel should be duty free
If people cannot use boats they will find other ways to enjoy their leisure time. They will take their cars to the UK and France and fly to other holiday locations therefore the net carbon saving will be minimal.
Finally, as stated by you, there should be no tax increases until the Island knows where it is going from a tax perspective and only when this point has been addressed should anyone even consider an increase in tax like the one proposed.
Guernsey Chamber of Commerce