Finally, some common sense when it comes to taxing foreign lorries. They are a common sight on British roads, yet do not have to pay UK Vehicle Excise Duty (VED). British-registered trucks have to pay up to or over £1000 per year, which puts them at a competitive disadvantage, leading to claims that foreign drivers are taking their business. Yet when British lorries work in other European countries, they are hit by road tolls, which many countries use in place of a VED system, and which everyone must pay regardless of nationality.
The government’s new proposal is that all lorries will have to pay up to £1000 to use our roads, with VED cut by the same amount for British lorries. It is presumably being introduced in this way so as to avoid breaking European law, which could be the case if EU vehicles from outside the UK were treated differently.
I feel this is a welcome proposal that will make the situation much fairer. If foreign hauliers have to increase their prices, British companies may consider either giving their business to British hauliers or even transferring some freight to the railways. Either way it will be an improvement.
However, rather than welcoming the proposal, many people commenting on the BBC article have decided to turn the topic to fuel duty, repeating an often-heard claim that it unfairly disadvantages British lorry drivers. They claim that European drivers are better off because other countries impose less tax on diesel fuel. This is a completely flawed argument. If it is economical for a foreign lorry to cross the English Channel to carry out a job in Great Britain, then cross the Channel again to fill up with diesel, it would be just as economical for a British lorry to do the same. If the distance is too great and a fill-up is required in the UK, the foreign driver has to pay the UK rates of fuel duty. There are no circumstances where a driver from mainland Europe doing a job in the UK is at an advantage when it comes to the price of diesel. If they can return to the mainland to fill up, so can a British lorry. In fact, businesses tend to be quite smart when it comes to tax avoidance, so if this is really a way to save money, they will be doing it already. It’s true that a lorry driver carrying goods between Glasgow and Aberdeen each week would be better off if fuel duty was lower, but a Polish driver on the same route is not at an advantage when it comes to fuel as he would have to drive all the way back to the Continent to enjoy lower fuel prices, which would not be economical, and if it was, the Scottish driver could do the same.
Whatever the rights and wrongs about high levels fuel duty, it is a fact that British drivers are not at a disadvantage compared to European drivers working in the UK when it comes to the price of diesel. The inequality is that British hauliers must pay to use our roads, and pay tolls on the Continent too, while Continental drivers use our roads for free. That inequality will be addressed by these proposals, so let’s leave the more general discussions about fuel duty for another day.