Labour’s lorry tax: Industry reaction

Labour’s lorry tax: Industry reaction

The Labour Party’s plans to impose a £12,096 a year lorry tax per truck would penalise British hauliers and put businesses and the economy at risk, business groups from the transport and logistics sector have warned.

The plans were mooted by Clive Lewis, a member of the Shadow Treasury team last week and, according to FTA, are based on inaccurate information.  

Lewis quotes research that claims HGVs currently only pay 11 per cent of their UK road infrastructure costs but Christopher Snelling, Head of UK Policy at FTA said this figure is inaccurate: “The claim that HGVs only pay 11 per cent of their UK road infrastructure costs is false –between the highest fuel duty of any major economy in the world, the HGV Road User Levy, VED and road tolls, HGVs in fact currently pay enough tax and charges to cover over 90% of the UK’s entire road maintenance budget.”

According to the FTA, the total UK spending by all authorities on highway maintenance (including bridges, footpaths etc) was £4.7bn in the financial year 2015-16; tax take from HGVs alone covered almost 94 per cent of this cost. 

Snelling continued: “Britain needs HGVs to deliver nearly four million tonnes of goods every day in order to function. Everything that makes operating a lorry more expensive makes Britain a less competitive place to do business and increases the cost of goods in the shops.”

He concluded: “There are smart ways to work to reduce the environmental footprint of HGVs and make logistics more efficient, that could benefit us all. Blunt tax hikes are the opposite of that and would change nothing while hurting the economy.”

The Road Haulage Association (RHA) said it was shocked at Labour’s Shadow Treasury team’s call for even more taxes be piled upon the haulage industry.

Commenting, RHA Chief Executive Richard Burnett said: “Britain's hauliers already pay some of the highest taxes in Europe. The suggestion that a Labour Government would massively increase taxes on the movement of goods is beyond belief… It will undermine the competitiveness of all UK industry and ramp up inflationary pressures”.  

“It is clear from his comments that Labour’s Treasury Frontbencher, Clive Lewis, sees our industry as ‘the bad guys - the emission bandits’. Nothing could be further from the truth. For years we have been extolling the virtues of the industry’s new, cleaner, trucks but it’s clear that the Shadow Chancellor has no idea as to the importance of the industry on which the people and businesses of the UK depend. We shall be seeking a meeting with his team as soon as possible to give them the clarity that is so obviously lacking.

“These latest proposals are a further own goal as they will undermine the sector’s massive ongoing investment in newer cleaner vehicles. What is even more shocking is the cavalier approach of Mr Lewis who is content to see HGV businesses go out of business as a direct consequence of this tax hike.

“These proposals are also at odds with comments made by the Shadow Secretary of State for Transport, Andy McDonald at the RHA’s Parliamentary reception at the end of October when he praised the work of the industry, affirming its position as the business sector on which the rest of the economy so heavily relies.

“Labour’s aspirations to land British hauliers with an enormous bill of £6bn pa (over £12,096 a year per lorry) is, at best, naïve. And it won’t just be the haulage industry that pays, everyone that relies on trucks to keep manufacturers, supermarkets, schools and hospitals going will be hit.

“This is a dangerous game and these latest proposals will simply alienate the 2.5 million potential voters employed within the industry – votes on which the Labour Party so strongly depends.”

A Labour spokesman told the Daily Express: “The real threat to hauliers is this Tory Government and their failure to secure a Brexit deal.

“Reports there will be just 1,200 (EU) permits to share between 75,000 British lorries after Brexit is concerning.”