News

The government is to freeze vehicle excise duty (VED) for LGVs in 2008-9 to counteract the affect of the 2p/lit fuel duty increase that came in on Monday. The move comes after the Road Haulage Association (RHA) and the Freight Transport Association (FTA) 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 initially asking for the 2p/lit duty rise to be postponed however it still was implemented on Monday. Failing that, the RHA and FTA asked for a rebate for hauliers, a vignette or a mechanism to separate fuel duty for goods vehicles and other road users.

A Treasury spokesman says VED has been frozen to give more stability to hauliers. "It's important 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 dedicated £2m, to be raised from the graduated fixed penalties and spot fines being introduced next year, to the enforcement of foreign trucks. A progress  report on delivering targeted enforcement will be released in the Pre-Budget Report the government says a strong option is the introduction of a vignette.

Geoff Dossetter, corporate affairs director at the FTA, says the minimum the government will raise from the road haulage industry through fuel duty is £130m 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 was surprised by the announcement because "we never imagined [they] wanted to put it up if they were putting fuel duty up". He adds that the freeze could be a prelude to the vignette which may affect the way UK operators are charged.