Freight industry cautious welcome for Tory lorry tax proposals

The Freight Transport Association (FTA) says that Conservative Party plans to charge foreign lorries to travel on UK roads are welcome and would help to restore fair competition between the UK domestic transport industry and ever increasing numbers of foreign vehicles working in the UK. However, FTA says that such a plan must not be used as a stealth tax on UK transport to fund essential road building. Such investment must not rely on increased taxation from an already overtaxed UK road transport industry.

FTA, which represents companies operating over 200,000 lorries - almost half the UK fleet - was reacting to Tory proposals to charge a distance tax for all lorries, both UK and foreign, working on UK roads. Under the plan, UK vehicles would be compensated by a cut in fuel duty or Vehicle Excise Duty, so that their tax bill would remain the same. Foreign vehicles would therefore begin to pay road taxes in the UK and the money would be used to improve the UK road network.

FTA External Affairs Director Geoff Dossetter said, 'The Conservative plan appears to be similar to the Lorry Road User Charge proposed by the Government and then scrapped in 2005. Such a scheme is attractive because it would charge foreign lorries for using UK roads and help equalise the enormous difference in operating costs between the UK and the rest of Europe, caused by UK diesel being taxed at 48p per litre against an average for the rest of the EU of just 23p per litre.

'However, the UK road transport industry needs a guarantee from the Conservatives that there would be no real increase in the level of taxation on UK commercial vehicles for the foreseeable future.

'The plans to enhance the strategic road network are essential, common sense and ever more necessary as the economy grows and the car population continues to increase. Every year millions of man hours and billions of pounds are wasted as a consequence of what is now totally unacceptable congestion on our major trade routes.

'But UK lorry operators are already paying extremely high levels of taxation, well in excess of their foreign competitors. A single UK lorry doing 75,000 miles per year delivering the economy pays over £31,000 per year in tax. That enormous burden must not increase.'

The Conservative Party plans are contained in a report from John Redwood's economic competitiveness group.