It’s this last category I want to sound off about – the truck driver who lands at Dover, or who comes through the Channel Tunnel on Le Shuttle, with a tank brim full of diesel holding 400 or more litres. I say a tank but often it’s two, each at 400 litres.
That gives him a range of more than 1,500 miles – enough easily for a trip to Scotland and out again – all without paying a penny to the UK. In fuel duty he’s saved a packet. Diesel duty in the UK is 47.1 pence per litre while across the rest of the EU it’s 22ppl. On 800 litres that’s a saving of £200 a trip.
But tax neutrality is a hard objective to achieve. The calculations to arrive at such a position are impossibly difficult so the Government can only put forward its best estimate. But of course, the charge can be varied to take account of time of day, roads used and prevailing congestion and it is on this last point that I have most concern.
The Department for Transport may well become involved and use the LRUC as a means of attempting to reduce congestion by flexing the charge. So, perhaps the cheapest rate would be on the M8 in Scotland at 3am but herein lies a further problem – the lack of joined-up government. Most local authorities ban deliveries to shops, for example, between 11pm and 7am, so trucks would not be able to take advantage of the low charge rates. Do you see now what I mean about the tax neutrality calculations being impossibly difficult?
The LRUC will come into force and of course, we have reservations about how rental companies will be able to manage the allocation of charges among their customers. But we are working with HM Customs, who will collect the charge, and we are confident of an eventual and successful outcome.
But if trucks will be charged for road use from 2007/8, when will cars be brought into a similar regime? Our support for the LRUC does not, of course, automatically extend to other road user charging schemes some of which are blatant revenue raisers. The Chancellor already takes more than £40 billion from the motorist each year and pays back less than £10 billion in infrastructure improvements. He will take billions more in a car road user charge.
It’s up to each one of us to make sure that this additional money is spent on transport infrastructure and not on general expenditure. We need better roads with less congestion and integrated public transport systems – for these are the arteries through which our nation’s economy flows. Without such improvements how can we hope to remain competitive in the longer term?
Director-general, British Vehicle Rental and Leasing Association