Modernising the taxation of the haulage industry

Paul Boateng, Financial Secretary to the Treasury, today announced further details about the Government’s plans to modernise the taxation of the haulage industry.

At a meeting with representatives from the haulage industry and environmental, motoring and business organisations, Paul Boateng said:

“The Government is committed to ensuring that hauliers from overseas pay their fair share for using UK roads. Following consultation and Chancellor Gordon Brown’s recent Budget announcement, we are today publishing more details about how we intend to deliver this commitment.

“We have decided to introduce a new lorry road-user charge that will be related to the distance travelled on UK roads and will apply to lorry operators using UK roads regardless of their nationality. However, we recognise that the UK haulage industry already pays towards the costs it imposes in the UK. We will therefore ensure that the UK haulage industry does not pay any more as a result of this charge by introducing offsetting tax reductions when the charge is introduced. We aim to introduce this new charge in 2005 or 2006.

“Our decision to modernise the tax system in this way follows intensive consultation. I am delighted that this policy has been backed by the haulage industry, environmental organisations and other stakeholders. It shows how – through working together – we can achieve real reforms that bring together our concern for the environment with the needs of the haulage industry.”

John Spellar, Minister for Transport, said:

“This is an important day for the haulage industry. It demonstrates the Government’s commitment to modern, competitive and environmentally-responsible haulage, building on other recent announcements such as the reforms to lorry vehicle excise duty and the £100m Haulage Modernisation Fund.

“The progress report we are publishing today sets out more details about why we have chosen to introduce a distance-based rather than time-based charge, our preliminary thoughts about how the charge will work and the next steps in implementing this policy. It will help to ensure that foreign hauliers pay their fair share.”

The report, Modernising the taxation of the haulage industry – progress report one, outlines:

why the Government has chosen to introduce a distance-based rather than time-based lorry road-user charge – drawing on the responses to a consultation exercise and further analysis;
some preliminary thoughts about the nature of the charge – for example, the Government is considering applying the charge to all roads and varying the charge according to the weight and axle structure of lorries; and
the key next steps.

Notes for editors

In a meeting in the Treasury today with a range of stakeholders, the Financial Secretary to the Treasury and the Minister for Transport launched a progress report titled Modernising the taxation of the haulage industry – progress report one. Copies of this document are available on the HM Treasury website.
The meeting and report provide further information about the announcement in Budget 2002 that the Government intends to modernise the taxation of the haulage industry. The Budget decision followed the conclusions of a consultation exercise based on the document titled Modernising the taxation of the haulage industry – a consultation document that was published alongside the November 2001 Pre-Budget Report.
Further details about Budget 2002 changes to environment and transport taxes can be found in HM Treasury Press Notice 2 of 17 April 2002 titled Working with business and consumers to protect the environment.
Details about the £100 million Haulage Modernisation Fund can be found in DTLR Press Notice 310 of 5 July 2001 titled Spellar starts delivery of haulage fund.

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