The UK government has signalled a tax overhaul for the HGV industry to be implemented by February 2019. This will see environmentally-friendly HGVs rewarded and older models punished. These reforms will be made through the Heavy Goods Levy to ensure that all haulage work uses the cleanest lorries available to the mass market.
The government plans to implement a tax rate change to HGVs. The new standard will see lorries that meet the latest Euro VI emissions target given a 10% discount on the HGV Road User Levy. These greener lorries will face a charge of £900 instead of the previous £1000. However the policy is one of winners and losers, whereby vehicles that do not make the standard will be subject to a significant 20% increase in the levy. Doing the maths, this means larger pollutant vehicles will pay £1200, creating a £300 gap between lower and higher environmental vehicle grades.
The policy attempts to internalise the negative externalities of increased nitrogen emissions produced by dirtier HGVs. The greener models produce a whopping 80% less of the noxious pollutant. Haulage workis responsible for a damning fifth of the harmful pollutant from road transport annually, despite covering just 5% of the total miles.
In response the Road Haulage Association, the biggest of its kind in the United Kingdom, expressed significant concern at the government’s decision:
“Road transport operators have made huge strides in adopting cleaner air technologies. 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.”
The government clearly thinks that the progress made in the industry has not gone anyway near far enough. Continuing his statement of concern, Richard Burnett, the Road Haulage Association’s Chief Executive, criticised the placement of blame on hauliers. Instead, Burnett wants to see a suitable scrappage scheme which allows the government to subsidise the cost of buying new greener vehicles. Arguably this positive incentive would be much fairer to hauliers than the negative incentive of extra costs. The tax has also raised concern in the business community that any extra costs faced by hauliers will have to be passed on to customers in the form of higher prices.
The HGV Road User Levy is a relatively new tax which was implemented in the coalition year of 2012. It was developed as a means to make HGVs accountable for the extra stresses they place on Britain’s creaking road system. The government has since updated this policy to also account for the wider environmental impact HGVs produce. With a green strategy a firm priority for the current and all future prospective UK governments, hauliers can expect this to be just the start of wider reforms to haulage work.
Norman Dulwich is a Correspondent for Haulage Exchange, the leading online trade network for the road transport industry. Connecting logistics professionals across the UK and Europe through their website, Haulage Exchange provides services for matching haulage work with available drivers. Over 5,000 member companies are networked together through the Exchange to fill empty capacity, get new clients and form long-lasting business relationships.