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Excise changes but no down-licensing

5th November 1983
Page 5
Page 5, 5th November 1983 — Excise changes but no down-licensing
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Which of the following most accurately describes the problem?

A STREAMLINED vehicle excise duty structure is being proposed by the Department of Transport, but it is still displaying no enthusiasm for down-licensing, writes ALAN MILLAR.

The DTp's long-promised consultation document on the ved system, whose existence was first revealed when the Road Haulage Association had postBudget discussions with former Transport Secretary David Howell, has been circulated, and sets out ways in which excise duty could be restructured, even if the industry ends up paying the same amount.

The paper takes note of many points raised by the Freight Transport Association when it first complained publicly in 1980 about the track cost calculations used by the DTp in establishing its excise duty rates, but it goes much further by looking again at the entire tax structure.

It has accepted the FTA's point that although four-axle articulated lorries travel for 95 per cent of their mileage on motorways, trunk and principal roads, they are charged for a disproportionate share of their wear on minor roads.

The DTp proposes that road types be divided into two types, major and minor, with track costs allocated in proportion. It estimates, for example, that twoaxle 16.3-tonners will pay 30 per cent more ved, but 32.5-tonne artics 20 per cent less as a result of this change. There would be little effect on light vehicles.

Accident costs, which at present are excluded from track cost calculations, but which the 1980 Armitage Report on lorries, people and the environment said should be, amount to £140m. Goods vehicles over 1,525kg unladen would bear £8m of this, or £14 per vehicle. Light vans' track costs would rise by £6 per vehicle.

Another FTA recommendation to be incorporated in the DTp document is that haunching, the cost of strengthening the edges of roads, should be recalculated according to axle weights. This would reduce a 38-tonner's track costs by £90.

Subject to the Transport Minister's agreement, the DTp wants to incorporate operators' licence fees into the annual ved charge, and apportion this according to track cost calculations, and would add £40 to the track costs for a 38-tonner.

The DTp has rejected the FTA's request that passenger car units (pcu) should no longer be used for track cost calculations, but a revision of the pcu formula will cut £130 from the track costs for a 38-tonner.

For 1983/84, the DTp predicts that there would be a six per cent increase in car and light van track costs, from £109 to £116, an 11 per cent rise for 7.5 tonners from £330 to £370, a 15 per cent rise for a two-axle 16-tonner from £2,020 to £2,320, and a one per cent rise for a four-axle 30tonner from £5,140 to £5,190.

Reductions at the top end would knock 19 per cent off the track costs for 2+2 32.5-tonne artics (£6,730 to E5,450) and 2+3 38-tonne rs (£6,990 to £5,660).

The restructure would also simplify ved into two-tonne weight bands.

While the document makes no commitment either way about down-licensing — matching ved paid to the weight a vehicle carries rather than its maximum plated weight — it emphasises that adoption of it would increase enforcement costs.

"There needs to be a strong case to justify moving to a system involving more difficult and costly procedures," the document warns. And it says that stricter penalties for tax evasion are unlikely to work when there is a higher risk of offenders escaping detection.


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