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9 March 2012

Lorry charging is back on the agenda – but telematics are not

The prospect of lorry road user charging – over which many battles were fought during the last decade – has been raised again by the current UK Government.

This time the objective is purely to tax foreign vehicles operating in Britain, providing a counterbalance to the often high road tolls already imposed on UK-based vehicles operating abroad.

Under the proposed scheme, foreign-based operators would pay either online or at the point of entry to the UK. The charge would applied at a daily rate, and is currently likely to work out at around £10 for vehicles of 12 tonnes gross or above. Smaller vehicles would be charged much lower rates.

Where the whole concept becomes somewhat complex is that under EU rules, the UK Government would have to apply the same charge to UK-registered vehicles as well – negating the benefit.

In order to counteract the impact of this, UK operators would be charged at an annualised rate, and would pay the fee as part of their vehicle excise duty. Then a more or less equivalent amount would be subtracted from the VED component. In other words, the amount would be added but taken away again, producing little or no net increase.

Unfolding the plan, Roads Minister Mike Penning argued that foreign-registered trucks make 1.5 million trips a year to the UK, and none of them pays to use UK roads, whereas UK operators often pay £10 to £20 a day to operate abroad.

In a consultation paper, the Government says it looked at applying a distance-based tax, but found the charges would work out much higher, and its idea of refunding the charge would not work under EU rules.

It says that under its present proposal, operators of 94 per cent of UK-registered HGVs over 12 tonnes hauliers would pay no more than now, and the highest increase would be £79 a year.

Back in 2004, the then Labour Government wanted to introduce a telematics-based lorry road user charging scheme, which would have tracked every goods vehicle operating in Britain at all times.

The idea was finally dropped two years later amid howls of protest about the likely infringement of civil liberties, and it was later revealed that the probable cost (several billion pounds) could never have been matched by the revenue (millions).

This time the technology component is much more low-key, though a third-party contractor would actually administer the scheme, and it remains to be seen what technology it would consider necessary.

Operators’ associations are keen. The Freight Transport Association, for instance, has welcomed the idea, though adding that it must be both revenue-neutral and not administratively burdensome for UK hauliers. What it might cost the Government to set it up is of course another matter.

The consultation runs until 18 April, and the idea is to introduce the scheme by 2014 or 2015.


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