19 September 2012

Foreign lorry charges welcome, but let’s check the details

Whilst in principle the government’s announcement to charge foreign lorries using British roads is to be welcomed, it’s still unclear how this will work in practice and, crucially, whether or not it will have the desired positive impact on UK hauliers.

The move, announced on Sunday, is supposed to create a “level playing field” for British lorry drivers and businesses.

For years now we have had the ridiculous situation where UK hauliers are charged for operating overseas, yet when foreign-registered lorries come to the UK they do so for free.

In its statement the government’s transport secretary, Patrick McLoughlin, said the proposals would give our industry a “vital shot in the arm” aimed at “increasing UK competitiveness and boosting growth”.

There is a void between the cost of operations if you’re based in the UK against those hauliers based abroad, particularly from the east of the EU, so these proposals should have some impact upon levelling this cost differential.

So far so good. But let’s remember that this is still only draft legislation, the full detail of which is yet to surface, and already some alarm bells are sounding.

For instance in order to make this work the government says it will have to charge all hauliers – foreign and UK – before reimbursing the UK hauliers through a cut in vehicle excise duty, the idea being that most of us will pay no more than we do already. Let’s keep an eye on that!

Also, the widely quoted daily charge for foreign lorries to operate on UK roads is about £10, limited as it is by EU legislation. That sounds quite low to have any real impact and ought to be four or five times that amount.

Here at Wincanton, and I’m sure at other haulage businesses across the UK, we face a price differential of up to 15 per cent when compared against some foreign hauliers who pay their drivers less, buy cheaper fuel outside the UK, and who generally have lower maintenance thresholds, leading to their lower operating costs.

Another concern is about the administration of this scheme – who will shoulder that burden? Quite possibly this will be yet more unwanted red tape for our already tightly-regulated industry.

And, at the same time this is being introduced, we will also see the removal of the RPC (Reduced Pollution Certificate) scheme which has been recompensing us for the early adoption of vehicles with 'cleaner' emissions. This will affect upwards of 30,000 vehicles across the UK, and result in additional costs, and potentially throw the vehicle's residual values into a spin.

A further key question here is what happens to the money after it is collected from foreign haulage companies? Just a thought, but ought it go towards increased policing of foreign hauliers to ensure that both the vignette and cabotage rules are adhered to, and that the true rate of non-compliance is understood and addressed?

So of course we welcome any move that will, in the secretary of state’s words, “provide a shot in the arm” for our industry, but we are still in the dark about how things such as the UK haulier refund will be organised, and the potential administration nightmare this could create, together with concerns that the loss of the RPC scheme as a direct result of this proposal may mean that we, along with the entire UK haulage industry, are out of pocket.

The coalition government is keen to push this through during the current parliamentary session, so we may not have to wait too long for the all-important detail contained within this legislation.

The Wincanton team