Hauliers to be stung with government 'green tax' for older HGVs

 

Around half of UK hauliers face a 20% hike in HGV Road User Levy fees next year after government reforms to the scheme revealed today (28 March).

Dubbed the “green tax” when reform plans were first mooted last autumn, the government plans to encourage uptake of cleaner HGVs by offering a 10% discount for Euro-6 trucks, while charging Euro-5 and older an extra 20%.

For a typical 40-44-tonne artic, this will add an extra £200 to the current £1,000 annual levy fee (see box, below).

The new rates will take effect from February next year and form part of the government’s wider strategy to improve air quality.

Announcing the reforms today, roads minister Jesse Norman said: “This government is committed to improving the air we breathe and delivering a green revolution in transport.

“HGVs account for around a fifth of harmful nitrogen oxide emissions from road transport, but they only travel 5% of the total miles. 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.”

Changes to the levy based on maximum fee (40-44-tonner)

 Current rate  Euro-6 rate from Feb  2019  Euro 1-5 rate from Feb 2019
 £1,000  £900

 £1,200

 

The RHA slammed the “grossly unfair” move and urged the government to support the industry’s transition towards cleaner vehicles with a scrappage scheme.

Chief executive Richard Burnett said: “We’re at a complete loss as to understand government’s latest decision to inflict yet more pain with another tax hike on hauliers.”

He added that hauliers have already made huge strides in adopting cleaner technologies, which the government has not acknowledged. 

“Of course, we all want clean air," said Burnett. “But we consider it grossly unfair that government uses clean air policies to justify squeezing money out of already cash-strapped hauliers to plug financial gaps elsewhere. Where is the incentive? What’s needed is a realistic scrappage scheme that supports our industry during this transition, not a penal approach.”

The RHA said the government’s figures that show HGVs accounting for around one-fifth of harmful NOx emissions are a “shameful exaggeration” as they do not take into account the shift to Euro-6 that has already taken place, or non-road transport emissions.

“This latest move is aggressive, anti-business and does nothing to reassure the industry responsible for moving 90% 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,” said Burnett.

The FTA welcomed the recognition of Euro-6 trucks as a clean technology by government and the 10% fee discount.

However, it said the decision will unfairly penalise small and medium-sized hauliers, who are already struggling to upgrade their fleets to comply with pending clean air zones.

Christopher Snelling, head of UK policy at FTA, said: "It hurts them because the re-sale value of their slightly older lorries, the Euro-4 and 5s, has fallen so much - making the jump to afford a new Euro-6 so much greater." 

FTA believes the government should have loaded the increase on to older most polluting lorries (Euro-3 and below) to create a short-term market for the Euro-4 and 5 vehicles that those delivering to city centres will be seeking to sell on.

Snelling added: "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. 

“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."