Wednesday 23 October 2019

Trade groups slam ‘unfair’ road user levy changes

Transport trade groups have issued strong criticism regarding recently-announced changes to the HGV road user levy, which will see operators pay 10 per cent less via the tax for lorries meeting Euro 6 emissions standards – but 20 per cent more for those at Euro 5 levels and below.

The HGV road user levy, which was introduced in 2014, applies to all lorries of 12 tonnes or more operating on UK roads. The exact figures payable depend on vehicle weight and number of axles, but the current maximum annual rate per vehicle is £1,000. From February 2019, this will fall to £900 for Euro 6 vehicles, and rise to £1,200 for non-Euro 6 trucks.

The change is being promoted by the Department for Transport (DfT) as part of the government’s £3.5 billion air quality plan, and as a means of incentivising truck operators to contribute to improving the UK’s air quality.

Indeed, the government estimates overall impact on the Treasury to be negligible until 2020, and to decrease the total tax take thereafter, as more operators shift to newer, cleaner vehicles.  More than half of UK vehicles would pay less from the outset of the changes, the DfT said – while the industry overall would pay less in time as increasing numbers of fleets moved to Euro 6.

But the Freight Transport Association (FTA) warned that while the changes were “a step on the road to improving air quality”, they would come at the expense of small and medium-sized businesses, which it said would be unfairly penalised as a result.

“The reduction of 10 per cent in the road user levy for Euro 6 lorries is good news, as it shows recognition for the success of the HGV Euro 6 vehicles, which have 80 per cent lower real world local emissions than previous lorries,” said Christopher Snelling, FTA head of UK policy.

“However, the introduction of the increased levy on pre-Euro 6 trucks will actually hurt those small and medium sized business that already face increased costs, as they need to upgrade to Euro 6 vehicles early to be compliant with the planned clean air zones.”

Snelling said that smaller businesses would be hurt because of the drop in resale value of their older vehicles, making the switch to Euro 6 a greater burden.

“Trucks have been getting cleaner for decades; we are not dealing with an intractable problem but merely the question of how soon do the beneficial changes come,” he continued.

“ The government’s approach to cleaner air risks putting some smaller hauliers’ livelihoods at risk for only a temporary gain on air quality.  The reform of the levy was an opportunity to help, and for the most part the government has failed to take it.”

FTA added that the government should have applied the increase only to the most polluting lorries (Euro 3 and below), which would have helped create a short-term market for Euro 4 and 5 vehicles being sold on by firms delivering to city centres.

Meanwhile, the Road Haulage Association (RHA) said it was “dismayed” by the DfT announcement, with chief executive Richard Burnett declaring that the association was “at a complete loss” as  to understand the government’s “grossly unfair” plan to “inflict yet more pain” on hauliers.

“Road transport operators have made huge strides in adopting cleaner air technologies,” he said.

“Despite this, government has made it very clear it has no interest in either acknowledging that progress, or in supporting the industry on its journey to an emissions-free future.”

Burnett continued: “What’s needed is a realistic scrappage scheme that supports our industry during this transition, not a penal approach.

“This latest move is aggressive, anti-business and does nothing to reassure the industry responsible for moving 90 per cent of the economy that it’s doing a great job. With Brexit looming this industry needs some good news. The reality is that this latest announcement amounts to little more than delivering another kick to an industry already on its knees.”

Announcing the changes, roads minister Jesse Norman said that the government was “committed to improving the air we breathe and delivering a green revolution in transport”.

“HGVs account for around a fifth of harmful nitrogen oxide (NOx) emissions from road transport, but they only travel five per cent of the total miles,” he said.

“That’s why we’re changing the HGV levy to encourage firms to phase out the most polluting lorries and bring in the cleanest ones.”

But the RHA accused the government of “shameful exaggeration”, saying it had failed to take into account the shift to Euro 6 that was already taking place, while ignoring non-road transport NOx emissions altogether.

The environment minister Thérèse Coffey said: “Air pollution has improved significantly since 2010, but we recognise there is more to do, which is why we have put in place a £3.5bn plan to improve air quality and reduce harmful emissions.

“Poor air quality affects public health, the economy, and the environment; and all motorists, including hauliers, must play their part if we are to clean up our air for the next generation.”

1 comment

  1. david haggis says:

    i agree there should be some help for small businesses. the introduction of these measures is far to quick, it is not giving us enough time to upgrade, there is a lack of euro 6 vehicles around and what is the price has soared to beyond reasonable as they know its supply and demand. its like the cartel are at it again fixing prices.
    this is very likely to be the death knoll of small companies. we just cant compete. they bring in a blanket recommendation and never any help for small business.

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