Taxing Virgins

Congratulations to Richard Branson for running Europe's first biodiesel train.

However, regular readers will know that one of the biggest complaints that we have is the high level of tax levied on biofuels by the government. And in his press release Branson makes it clear that one of the factors that has enabled this trial is a concession with the government on the fuel duty that they will be paying to a level which will make it commercially viable. Indeed, in the notes accompanying the last budget there was advance notice that there would be trials to establish the correct level of taxation of biofuels for off road use. And it didn't take a rocket scientist to work out that they were talking about Virgin Trains.

Biofuels currently get a 20p a litre reduction in road fuel duty - which so far the Prime - Minister in Waiting has trumpeted as part of the Government's commitment to carbon reductions. The truth is that biofuels are significantly more expensive to produce than petroleum fuels, the price of the raw materials is significantly more volatile and the 20p a litre rebate is not enough to make them competitive.

Mr Branson as we all know is no fool. He has pledged massive investment in biofuels over the next decade and putting pressure on the government to reduce the level of taxation is a key part of that.

We're right behind you....

For those of you who are wondering - my 360 degree feedback site is now sitting at number 15 on google.com and the reason for the change in layout of my blog is to try and escape Google's dreaded Supplemental Index.