Treasury U-turn on road charges is 'good news'

20 July 2005
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21 July 2005 | Anusha Bradley

The Treasury's decision to axe a plan to replace fuel duty for trucks with a road-pricing scheme is good news for purchasers, according to freight procurement specialists.

The announcement was made this month, and reverses plans that would have equalised tax levels for UK and overseas trucks operating in Britain.

Freight Traders, which buys freight services on behalf of firms including Unilever and Corus, said haulage prices would have risen if the scheme had gone ahead.

Garry Mansell, managing director, said: "In my view, the solution was like taking a sledgehammer to crack a walnut."

He said instead of using costly technology, drivers should self-declare the miles they drive.

Geoff Roberts, director at procurement consultancy ADR International, which has several freight operators and freight-buying clients, said: "This is good news for buyers because they will not now be under pressure to accept this stealth tax." He added many haulage operators were looking at ways to pass the extra tax onto customers as a fuel surcharge.

"With all other increases such as fuel and labour, this is one less element to worry about."

The pilot scheme, involving 440,000 lorries, was set to begin in 2008.

Testing of potential tracking and charging technology was completed last month and a shortlist of suppliers had been finalised for three major deals.

The Treasury dismissed reports it rejected the scheme because of estimates that it could cost up to £2 billion to introduce.

A spokesman said the government wanted a "single, comprehensive cost-effective system, rather than two reasonably compatible systems [one for lorries, and one for other vehicles]".

It is now expected to be part of a national road-pricing scheme scheduled to start in 2015.

Both the Treasury and potential suppliers insisted efforts had not been wasted because the technology could be applied to the national scheme.

SMjul2005

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