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Brown promises to charge foreigners
Page 8
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w by Miles Brignall
Hard-pressed hauliers who breathed a sigh of relief when the Chancellor announced a freeze on diesel duty in the Budget last week still face a significant jump in their National Insurance bills.
Many welcomed Gordon Brown's decision to freeze fuel and vehicle excise duties, but at the time few realised the true cost of his decision to increase all NI contributions by 1% to fund improvements in the National Health Service.
The Freight Transport Association estimates that the NI hike will cost the haulage industry £160m—the equivalent to increasing the cost of diesel by 1.5p/lit. However, this reflects the total cost for haulage companies, many of which employ large numbers of warehousing and other staff.
Wage packets
While most drivers will look at their wage packets and conclude a 1% rise will be easily afforded, the move hits employers much harder. At present, businesses are charged at a rate of 11.8% on the earnings of their employees between £4,615 and £30,240pa. That rate will rise to 12.8% from next year. The crucial difference is that employers will now also pay a further 1% on all wages above the old NI ceiling.
This means that successful company bosses will not only see their company NI bills rise—
they will also start paying 1% NI on all salaries above that level. Anyone earning £50,000 a year will cost their company about £1,000 more when this comes into force next April.
Apart from the NI surprise it was a fairly quiet Budget for the haulage industry. For the first time in recent memory VED was left unchanged; a move welcomed by the Road Haulage Association: "We are delighted that the Chancellor at last appear-s to have recognised the very real problems being faced by UK hauliers and has decided not to add to them by raising fuel or vehicle excise duties." says chief executive Roger King.
Gordon Brown also promised tougher enforcement of the law banning rebated red diesel from haulier's tanks and gave a further commitment to start charging foreign-registered vehicles to use UK roads.
Richard Turner, chief execu tive of the Freight Transport Association has praised this move: "It is only right that we create a level playing field, However we favour the distance-based system rather than a paper-based Brit-disc.
We see this as a stalking horse towards all road users paying for road use," Turner adds. "Ideally we would like to have it now, but the technology isn't there."
Charging system A meeting has already been scheduled for today 125 April) between the industry and treasury officials and Transport Minister John Speller to discuss the proposed distance-based charging system.
Chancellor Gordon Brown promises that the scheme, which is designed to make hauliers from overseas "pay their fair-share towards the cost of using our roads", will not penalise UK operators.
Instead there will be "offsetting tax cuts for the UK haulage industry", he says. This is thought most likely to come via VED or fuel duty reductions.