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VED frozen to offset increase in fuel duty
Page 6
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The government will offset the diesel duty hike with a freeze on VED, and it favours vignettes to monitor foreign trucks. Roanna Avison reports
THE GOVERNMENT IS to freeze vehicle excise duty (VED) for LGVs in 2008/9 to counteract the affect of the 2 p/lit fuel duty increase that came in on Monday.
The move comes after the Road Haulage Association (RHA) and the Freight Transport Association (ETA) called on the Treasury to give hauliers a rebate on fuel duty.
The two organisations delivered a declaration and letter to the Treasury last Friday, asking for the 2p/lit duty rise to be postponed; This plea was rejected.
However,the RHA and ETA also asked for a rebate for hauliers, the introduction of a vignette or some other mechanism to separate fuel duty for goods vehicles from other road users.
A Treasury spokesman says VED has been frozen to give more stability to hauliers, adding: "It's impor tant we support UK hauliers in the face of foreign competition. The fuel duty rises are important in raising funds and tackling pollution, but we are also aware of the importance of supporting the UK haulage industry."
At the same time the Department for Transport has promised that the £2m it expects to raise next year from graduated fixed penalties and spot fines will be used to fund crack down on foreign trucks.
A progress report on delivering targeted enforcement will be released in the Pre-Budget Report; the government says the introduction of a vignette is a strong possibility, Geoff Dossetter, corporate affairs director at the ETA,says the minimum the government will raise from the road haulage industry through fuel duty is 1130m per year,so freezing VED is like "compensating the industry with pennies and ha'pennies".
However, he welcomes the announcement that a vignette is a prime option for tracking foreign trucks entering the country.
RHA chief executive Roger King admits to being surprised by the announcement because "we never imagined [they] wanted to put [VED] up if they were putting fuel duty up".
He adds that the freeze could be a prelude to the vignette, which might in turn affect the way UK operators are charged.