Consultation outcome

Government response to Clarifying and reducing administration costs for maritime vessel light dues regulations

Updated 3 August 2023

The Department for Transport (DfT) completed a policy review of the Merchant Shipping (Light Dues) Regulations 1997 (the 1997 Regulations) which recommended several amendments to:

• further improve regulatory clarity
• ensure exemption criteria are transparent and align with policy goals
• deliver a reduction in administrative costs and burdens
• modernise formatting and drafting in line with current legislation practice

DfT consulted on its proposals to implement those recommendations, including a draft of new regulations, from 20 September to 15 November 2021.

This response summarises the replies received from stakeholders and sets out the government’s response.

DfT would like to take this opportunity to thank all those who took the time to consider its proposals and provide a response. These have been exceptionally useful in assisting DfT’s understanding of the issues and in developing the draft legislation further to ensure the future regulations are as responsive as possible to operational realities.

Response overview

The consultation ran for 8 weeks between 20 September and 15 November 2021. DfT received 8 responses which were from a range of interested stakeholders including light dues collection agents, national bodies, maritime sector organisations, groups representing user interests and those from individuals acting in a personal capacity.

All responses were supportive of the intended revisions but there were several areas where stakeholders requested further amendments, additional enhancements or sought clarification as to the policy intent. These are explained, together with DfT’s intended next steps, in further detail below.

Response Summary

For further background, refer to Annex A in the original consultation paper for a consolidated list of questions.

Question 1a: Do you think the changes DfT is proposing improve the legislative clarity of the 1997 Regulations?

DfT was seeking views on whether its rationale for proposing these amendments was an accurate reflection of the current position, all the relevant issues had been identified and that the suggested formatting and other changes would address wider concerns regarding legislative clarity.

Summary of responses

Of those who responded to this question, all were content that the changes proposed by DfT would increase legislative clarity. A number confirmed that the 1997 Regulations were difficult to interpret in places and that the need to constantly cross-reference between the main body of the regulations and the schedules meant that they were unnecessarily complicated to understand.

Question 1b: Do you know of any unintended consequences of the proposed changes to modernise and consolidate the 1997 Regulations? Please provide evidence where possible.

DfT was seeking views about the potential impacts of the proposed amendments and whether these may have any consequences beyond those already identified in the consultation paper.

Summary of responses

Of those who responded to this question, all were content with one exception which suggested there may be potential unintended consequences in respect of one of the amended exemption criteria for sail training vessels which may not be operated by registered charities and any sail training vessels which are not registered in the UK. One respondent suggested that the drafting of some of the exemption criteria might be improved to further aid regulatory clarity and prevent unintended consequences through potential differences in interpretation.

Government response (1a and 1b)

DfT welcomes confirmation of its view that the 1997 regulations were unclear in many places and that its intended revisions would increase legislative clarity. DfT has noted the issues and suggestions raised by respondents concerning the exemption criteria. These are explained in further detail in the relevant section below with DfT’s response.

Question 2a: What do you think of the proposed change for the basis of this exemption from ships of less than 20 tonnes to vessels measuring under 24 metres?

The 1997 regulations provide for an exemption from the requirement to pay light dues for ships (other than tugs or fishing vessels) of less than 20 tonnes. DfT proposed a change to this exemption from a tonnage-based requirement to a length-based requirement and sought views on the implications of this amendment.

Summary of responses

There was wide agreement that the proposal to move from an exemption based on tonnage to one based on length was an improvement. All noted that a length of under 24 metres was a suitable basis for that exemption and that this was consistent with wider maritime legislation which uses similar provisions to define scope.

Many respondents reflected that, in the case of smaller vessels, much of the applicable safety and other legislation was based on length and that the owners of smaller vessels were far more likely to be aware of the length of their vessels than their tonnage especially as this was also used, for example, for calculating the cost of marina berths and determining if vessels can be registered on the small ships register. It also avoided a lack of clarity around the application of the many different methods of tonnage measurement in use within the maritime sector.

However, while some respondents favoured the proposed exemption based on the overall length of the vessel, others preferred that the length measurement should instead be a vessel’s load line. They suggested that, for the owners of larger recreation vessels which were more likely to be near the threshold for paying light dues currently, the load line was a more appropriate measure. This was, again, due to a link with wider maritime safety and other legislation, such as the Merchant Shipping (Standards of Training, Certification and Watchkeeping) Regulations 2015 or the Merchant Shipping (Vessels in Commercial Use for Sport or Pleasure) Regulations 1988, which both use a 24-metre load line as their threshold for applicability.

One respondent indicated that there were several sail training vessels that would be exempt if load line were chosen but their overall length, at greater than 24 metres, would mean they might otherwise need to pay light dues. It was also noted that the choice of load line would be likely to achieve the same objective as overall length but add further clarity to the regulations since this was also the measure used to identify all vessels registered as small commercial vessels.

Question 2b: What would be the impact of this proposal on you or your organisation? Please provide evidence where possible

DfT was seeking views on the impacts of the potential change from a tonnage-based to a length-based exemption and whether there was anything missing from the analysis within the consultation paper.

Summary of responses

It was widely agreed that the move from tonnage to a length-based exemption (whether overall length or load line length) would be a significant improvement over the current tonnage requirement in the 1997 regulations. It would assist greatly the owners and operators of vessels which are close to the threshold for the payment of light dues by basing this on a criterion which was more likely to be readily known.

One respondent noted that, although it was unlikely that there would be any significant change in the numbers of vessels which currently paid light dues, bringing the criterion into line with wider maritime legislation would also reduce the administrative burden on the General Lighthouse Fund since information about a vessel’s length was also more readily available should there ever be a need to check these details.

Government response (2a and 2b)

DfT welcomes the support for its proposal to move from a tonnage to a length-based measurement. It has explored the possibility of moving to use of load line length as the basis for exemption as a measurement which is already in use for reporting for these craft under other maritime legislation. This has required significantly more detailed analysis of the way the current light dues regime is applied and the types of craft which currently benefit from the current tonnage exemption.

In undertaking this assessment, DfT has determined that the potential impact on light dues receipts of moving from the current tonnage-based criterion to any length-based (total length or load line) would be far more significant than previously anticipated. If introduced, this would lead to a far greater number of vessels being exempt from the payment of light dues and place additional pressure on an increase to the headline rate of light dues paid by larger ships.

Although DfT recognises the wider benefits of a length-based criterion, the significance of the potential drop in light dues and the longer-term implications for the income received by the General Lighthouse Fund cannot be ignored. For this reason, DfT has decided to retain the current tonnage-based exemption although it will continue to keep the position under review.

DfT will continue to investigate whether a method to measure tonnage should be directly specified within future regulations.

Question 3a: What do you think of the proposed change to make only sailing ships used primarily for sail training by a registered charity exempt?

The 1997 Regulations provide an exemption from the payment of light dues for sailing ships used exclusively for sail training purposes, operating as travelling museums or vessels of historic interest. None of these terms was defined in the 1997 regulations leaving the criterion itself open to interpretation.

Although the number of vessels captured by this exemption is small, they tend to be operated by charities so the payment of light dues could have a potentially disproportionate impact on their operating costs. DfT was seeking views on revisions to give the policy intent greater expression in the drafting of the exemption to ensure that, in future, it would be immediately clear whether a vessel would be within scope.

Summary of responses

Respondents welcomed the intended change and the increase in clarity it would bring. However, several highlighted that not all sail training vessels are sailing vessels themselves and suggested that the use of sailing ships within the exemption meant that these would not qualify for an exemption. They requested that the proposed drafting was widened to ensure all vessels which are used for sail training are captured.

Some respondents also noted that, although most sail training organisations were registered charities, a small but growing number are registered instead as community interest companies (CICs). These are limited companies which are operated on a for-profit basis but the organisation and its assets, as well as any profit, must be used to benefit the community. It was suggested that the exemption criteria should be widened to any registered charity, a subsidiary company operated by a charity or a CIC to ensure all current sail training organisation are captured by an exemption.

Concerns were also expressed that the exemption would only cover those sailing training vessels operated by UK charities and not those sail training vessels operated by charities based outside of the UK when they visit UK ports.

Government response

DfT notes that its policy intent is to exempt all ships which are used for sail training purposes regardless of whether these are based in the UK or overseas. It welcomes the support for this change and has considered the suggestions provided by respondents for further clarification of the eligibility criteria.

Following consideration, further amendments have been added to remove references to ‘sailing’ ships given the evidence supplied that not all sail training ships are sailing ships themselves recognising that this more accurately meets the policy intent of ensuring an exclusion for all sail training ships although these must also still be operated by a registered charity.

DfT has also noted the evidence that some charities are now operating their vessels as either subsidiary companies or CICs (and more are exploring the potential benefits of using these routes in future). DfT recognises that sail training organisations operate with high overheads given the need to maintain often large historic vessels. Further amendments to recognise these wider possible routes for ownership or operation have therefore been included although it is noted that many such vessels will potentially also benefit from an exemption through inclusion on the register of historic vessels.

DfT has also considered the possibility that sail training vessels which are not operated by a UK-registered charity, subsidiary company or CIC might not be exempt from the payment of light dues. Analysis of the movements of these vessels indicates that numbers are extremely small and that their arrival in the UK tends to be associated with festivals, such as the Tall Ships Regatta, or other similar events. The expansion of an exemption for all vessels registered on the National Historic Ships UK Overseas Watchlist is likely to capture some of these or, at minimum, offer the opportunity for those not currently registered to consider whether inclusion might be possible.

While it remains DfT’s policy intent that all such sail training vessels, when they are visiting UK ports, should be exempt from the payment of light dues, investigations to date have not identified a legally watertight criterion which might not lead to the creation of a potential loophole, for example, for other sailing vessels. There is no internationally recognised register of such vessels on which to base such an exemption nor has it proved possible to find any legislation from other countries where a precedent or similar reciprocal arrangement exists. The possibility of an exemption based on the International Maritime Organization’s Special Purpose Ships Code, ships of ‘traditional build’ or membership of a national sail training organisation has also been explored.

However, DfT has concluded that these options do not accurately reflect the policy intent, might significantly widen the scope of the exemption if included, would not provide any mechanism for control over eligibility or leave a gap in terms of mutual recognition.

DfT will continue to explore potential options for the basis of an exclusion for overseas sail training vessels with stakeholders.

Question 3b: What do you think of the proposed change to add a standalone exemption for historic vessels registered on the National Register of Historic Vessels?

DfT was seeking views on its proposals to base the future exemption for historic vessels on those registered in the National Register of Historic Vessels (the register).

Summary of responses

Of those respondents who expressed a preference, all supported the proposal to link an exemption for historic vessels to the register. Respondents felt that this would not only reduce the subjective nature of the current ‘historic vessel’ exemption but also bring significant additional rigour by recognising the processes and procedures already developed specifically to recognise and assess the historic nature of such vessels by the experts at National Historic Ships UK.

Respondents reflected that all vessels on the register needed to meet defined and rigorous criteria with those providing insufficient or ineligible information being rejected. All registered vessels are also provided with a certificate and identification number which can be shown to a light dues collection agent if required as well as the ability to double check validity on the register web site.

One respondent suggested that the exemption should be expanded to similar lists of UK Replica and Overseas Watchlists. These, respectively, recognise new build craft constructed using traditional techniques and skills for heritage purposes and vessels of UK significance which are now kept abroad for a period of more than 3 months (and do not, therefore, qualify for the register).

Government response

DfT has noted the overwhelming support for its proposal to change the basis for the exemption for historic vessels through a formal link to the register and intends to proceed with this change.

DfT has also noted the concerns expressed regarding those ships which may not be eligible for inclusion on the register, but which are listed on the UK Replica List and Overseas Watchlists. DfT considers its policy intent, to ensure that vessels of an essentially historic nature should be exempt from the payment of light dues, is equally applicable to newer vessels created specifically for purely heritage purposes and that vessels of historic significance to the UK should benefit from the same exemption when they visit our shores even though they may no longer kept in the UK.

In a similar manner to the Register, the UK Replica List and Overseas Watchlist are also managed by National Historic Ships UK. The criteria for eligibility are similarly transparent and both lists are also available online to facilitate checking.

DfT has reviewed the vessels on the UK Replica List and Overseas Watchlist and concluded that they meet its policy intent for this exemption. It has also investigated the potential impact on the collection of light dues of the exemption of vessels on the Register, the UK Replica List and Overseas Watchlist and determined that this would be negligible. Accordingly, DfT intends to recognise these additional registers to ensure that no UK vessels of historic age or character are charged light dues in future.

Question 3c: What do you think of the proposed change to remove the reference to ‘travelling museums’ from the exemption?

DfT was seeking views, given the intent to base future exemptions for historic vessels on those registered in the register, on the removal of the otherwise undefined and subjective term ‘travelling museums’ from the 1997 regulations.

Summary of responses

Of those respondents who expressed a preference, all agreed that the current definition was unclear since there was no definition of what constituted a ‘travelling museum’ and that removal would aid regulatory clarity.

It was noted that any craft in this category would likely be covered through the new exemption for those on the register with the only exceptions being those which were under 50-years old or lacked the necessary UK associations.

Government response

Considering the strong support for removal of the current ‘travelling museum’ criterion, DfT does not intend to include it within the future regulations.

Question 3d: What would be the impact of the proposed changes to you or your organisation? Please provide evidence where possible.

DfT was seeking views on the impacts of the potential changes to the criteria for vessels operated by charities and historic vessels and whether there was anything missing from the analysis within the consultation paper.

Summary of responses

Respondents noted that the proposed changes were unlikely to have any significant, or disproportionate, impact on the majority of those vessels which currently pay light dues. However, it would significantly improve regulatory clarity for those who meet the eligibility criteria for exemption by improving understanding of the basis for that exemption. Whist this is potentially only beneficial for a limited number of vessels, due to their size, scale and type of operational use, an exemption will relieve one of the financial burdens of operating these, often, unique craft.

Government response

DfT has attempted to be as responsive as possible in ensuring that its policy aim to exempt historic ships and those used for sail training purposes from the need to pay light dues is met. The Question 3a section notes that it remains DfT’s policy intent to provide an exemption for overseas sail training vessels and that it is continuing to explore the available options for the small number of these vessels which may be impacted when they call at UK ports.

Question 4a: What do you think of the proposed change to ensure that vessels engaged in commercial activity should not be exempt?

DfT was seeking views on its proposals to ensure that any vessels which are undertaking commercial activity and which are not, otherwise, exempt through qualification under one of the other exemption criteria should be charged light dues.

Summary of responses

Of those respondents who expressed a preference, all noted that the introduction of this measure would remove potential ambiguity in the drafting of the current regulations. Many agreed with the policy intent to charge light dues for such voyages given vessels would be using Aids to Navigation provided by the GLAs.

It was noted that some historic vessels were occasionally used to undertake commercial activity. Given the nature of these vessels, this was usually done on a small scale with any proceeds generally being invested back into maintenance or otherwise benefiting the continued operation of the vessel. Such vessels would still benefit from an exemption if they were in the Register, UK Replica List or Overseas Watchlist due to their historic status.

Question 4b: What would be the impact of the proposed change to you or your organisation? Please provide evidence where possible.

DfT was seeking views on the impacts of the potential changes to the criteria for vessels which are operating on a commercial basis and whether there was anything missing from the analysis within the consultation paper.

Summary of responses

Of those who responded to this question it was believed that this would be a useful clarification of the current criteria which were potentially open to subjective interpretation.

Respondents agreed that any vessel engaged in commercial activity but not otherwise exempt, such as those operated by charities, should pay light dues for the maintenance and operation of the marine aids to navigation which they use.

Government response (4a and 4b)

DfT welcomes the support for its proposal to ensure any vessel which is not otherwise exempt through another criteria and which is undertaking a voyage for commercial purposes should be charged light dues.

Further consideration has been given to the wording of this exemption to ensure that it fully meets the intended policy while enhancing regulatory clarity by ensuring it is clear under what circumstances vessels will be charged light dues. For this reason, the term ‘revenue earning’ has been removed in favour of ‘commercial activity’ and the additional criterion that the General Lighthouse Authorities (GLA) are satisfied that the vessel is not ordinarily kept at the port to which the arrival relates has also been removed since this includes a subjective test of a vessel’s ‘home’ port.

Question 5a: Do you think the 2-payment system should be retained or removed?

Question 5b: What would be the impact of the removal of the 2-payment system in favour of a single, annual, payment only on you or your organisation? Please provide evidence where possible.

DfT was seeking views on the perpetuation of the current ability for tugs and fishing vessel owners to make either a single annual payment or 2 equal payments on 1 April and 1 October to pay for their use of the services of the GLA every year. DfT’s review of the 1997 Regulations indicated that uptake of the 2-payment system was extremely low with anecdotal evidence indicating that this was creating additional costs and administrative burdens for both owners and for the light dues collection team.

Summary of responses

Only 2 responses expressing a preference were received. One was in favour of its removal on the grounds of reducing the costs of administration and one against on the basis that many craft were laid up for significant periods of the year by their owners and were not, therefore, using marine aids to navigation during those times.

Government response (5a and 5b)

DfT has considered these responses and intends to retain the current 2-payment system. However, it will keep this position under review to ensure the ability to pay in 2 instalments continues to remain relevant and fit for purpose while exploring other opportunities to further reduce administrative burdens and costs of this system.

Other revisions

Although not included as a proposed amendment in the consultation, the Northern Lighthouse Board (NLB – the General Lighthouse Authority for Scotland and the Isle of Man) has noted that the exemption for vessels navigating in the outer area of waters managed by the Forth Port Authority is an artefact from previous legislation which is no longer applicable following the transfer of many aids to navigation to the Forth Port Authority.

The light dues collection team has confirmed it does not charge vessels operating in this outer area and DfT has checked with Forth Ports Authority who are content for this reference to be removed.

The reference to the Port of London Authority within the draft Regulations remains relevant as a now unique case where port limits extend beyond aids to navigation owned and operated by the General Lighthouse Authorities.

Next Steps

DfT intends to introduce the new regulations, which will revoke and replace the 1997 regulations, at the next available opportunity. This is likely to be at the point at which the next amendment to the headline rate of light dues is made in due course.