The Chartered Institute of Logistics and Transport in the UK (CILT) has welcomed the announcement that the Government is to conduct a consultation on means of creating an effective charge on foreign lorries using UK roads. CILT says that such a charge would aid the competitiveness of the vital UK logistics industry and would pave the way for a new means of taxing commercial vehicles.
EU regulations demand that charges made on lorry operation must be applied on all such vehicles, whether UK nationals or foreign operators. As such, under the new proposals, all lorries, both UK and foreign, would be subject to a charge of around £10 per day. However, UK vehicles would be rebated the charge either through adjusted Vehicle Excise Duty (VED) or fuel duty.
CILT Chief Executive Steve Agg said: ‘We welcome today’s announcement. Due to substantial differentials in the rates of VED and fuel duty charged in the UK and the rest of Europe, UK lorry operators are obliged to work with higher rates of operating tax than apply elsewhere. At the same time UK vehicles operating in Europe are obliged to pay numerous tolls and other charges, whereas very few UK roads are tolled. The new proposals go some way to equalising these distortions.
‘Although the current plan appears to be targeted at a revenue neutral outcome for UK lorries, CILT sees this as an essential first step towards a fairer system of taxation for the logistics industry which will have long term positive benefits for UK business and consumers.
‘The current system of VED and fuel duty means that commercial vehicles and private cars are taxed in the same way despite the fact that they are used for widely different purposes.’
Last year CILT published its forward looking report titled Vision 2035 which considered the development of transport over the next 25 years. In the report CILT said: ‘More use should be made of pricing mechanisms to achieve transport policy objectives. In particular road user charging should be used to expose the external as well as internal costs of vehicle use.’
Steve Agg said: ‘The operation of an efficient and economic logistics sector is absolutely vital to the welfare of the economy and the life of the UK. Today’s proposals indicate that the Government is showing increased recognition of this reality and providing for it.’