Failure to raise vignette cap threatens validity of LRUC
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christopher.walton@rbi.co.uk CONCERNS HAVE BEEN raised that a lorry road user charge (LRUC), set to be operational by 2014 to “ensure a fairer arrangement for UK hauliers” , may raise as little as £19m a year.
According to an exclusive investigation by CM, the Department for Transport (DfT) has not received the support required from other European governments to change the maximum daily charge allowed under the Eurovignette Directive.
The government had been lobbying strongly to change the current cap, which is set at €11 (£9) per day, per truck. Professor Alan McKinnon, of the Logistics Research Centre at Edinburgh’s Heriot-Watt University, says that according to his calculations, annual gross revenue igures for the Treasury would be between £19m and £27m. “Even these igures may be overestimated as operators can buy Eurovignettes for longer periods and get discounted rates,” he says.
“As the system will have to apply equally to British and foreign irms [with no additional revenue from British operators – given the assurances about revenue neutrality], the admin costs may be reasonably high, leaving little, if any, net revenue for the Treasury.” He also cautions that one of the suggested measures to make the LRUC revenue neutral for UK operators – a reduction in VED – would not adequately compensate UK hauliers because it is set at a low level. “Some of the new vignette charge would have to be offset against fuel duty,” he urges. “This will be more complicated and costly. So why go to all this bother to raise tiny sums of money?”
A DfT spokesman tells CM: “The objective of the charge is not to raise revenue and the government is looking at ways of compensating UK hauliers for the charge so they are not worse off.”
The Freight Transport Association says it has been speaking to the DfT about the LRUC and stresses that if it goes ahead, “it needs to be right”.
● For the full story, see the investigation on p20.