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over dearer diese
• Dearer derv, but a freeze on excise duty for trucks and buses. That is what transport operators have been presented with in Chancellor Norman Lamont's first Budget.
Diesel goes up by 3p a litre following a 15% rise in dery duty — the same as for unleaded petrol. But the hold on VED will be a welcome relief for hard-pressed operators. The Chancellor called it a "Budget for Business" and predicted that Britain's economic recovery would begin in mid1990, with inflation expected to fall to 4% by December.
Mobile phones are to be taxed as a fringe benefit but, as CM went to press, the industry was unsure as to whether this would cover cab phones in trucks. However recovery operators did not escape the Chancellor's axe on VED. Their vehicle excise duty goes up 225.
The Chancellor promised that for the first time individuals would be able to claim tax relief on training for National Vocational Qualifications. Exams such as the CPC and HGV test are not covered by this at present, but bodies such as the Road Haulage Association are pressing for this to change.
Other Budget items include an increase in VAT of 2.5% to 17.5% and VAT relief for small firms from bad debts after one year instead of two.
The DTp later announced that the Transport Secretary would now have discretion to give VED refunds to hauliers who "travel by train in international combined transport operations".
There was a surprise for historic vehicle collectors — VED is being removed from nonoperational fire engines.
The rise in diesel will add 2% to operators' costs, says the Road Haulage Association. "Operators can't absorb this given the state of the industry and it will have to be passed on to the customer. They must insist the customer coughs up. The evidence is here," it says.
The association also welcomes the "recognition of liquidity problems for small businesses" in the move to extend VAT relief on bad debts to one year, but it still wants "more in the longer term".
The Freight Transport Association is pleased by the freeze on fuel duty, but says it is "disappointed that the Chancellor did not take the opportunity to widen the differential between petrol and derv".
In any case the benefits of the VED freeze are more than offset by the increase in dery duty, says the United Road Transport Union. "My members will be worse off with the rise in VAT," says general secretary Frank Griffin. He adds that what was needed was a big cut in interest rates.
BRS is disappointed by the lack of environmental tax incentives for truck operators. The Chancellor has encouraged the use of fuel-efficient cars, but "it does nothing to help commercial vehicle operators to adopt environment friendly initiatives", it says.
"The Chancellor says he has presented a budget for business — it is certainly not a budget for any form of transport business, whether passengers or goods," says Bus and Coach Council director-general Veronica Palmer.