HGV Road User Levy Bill
Significantly fewer vehicles will be paying more than £300 a year extra when the HGV road user levy is introduced than previously stated.
I am today (18 July 2013) correcting a figure that I quoted during the ways and means resolution debate on the HGV Road User Levy Bill, on Tuesday 23 October 2012, and during the second reading debate on Tuesday 20 November 2012. There will be significantly fewer vehicles paying more than £300 a year extra when the levy is introduced than I previously stated.
The reason for the additional costs once the levy is introduced is because some vehicles currently pay close to or below EU minimum rates of Vehicle Excise Duty (VED), and so VED cannot be reduced by the same amount as the levy, or indeed in some cases VED needs to be increased.
During the ways and means resolution debate I stated that:
… our analysis of 7,000 rigid vehicles that tow a trailer has found that 40 vehicles would probably suffer a penalty of some £300, but that is only 40 out of 7,000, which is a significantly small part of the overall haulage fleet of the United Kingdom.
[Official Report, 23 October 2012 Col 884]
I also stated during the second reading debate:
…there are a small number—about 7,000 of them on the road—of rigid vehicles with a trailer. Of those we estimate—the Department has done some analysis—that fewer than 50 will face potentially more than £300 extra in costs.
[Official Report, 20 November 2012 Col 497]
However, as a result of the government continuing to consider and refine the analysis for these vehicles, an error in the source data was corrected, and improvements were made to the methodology used to set the VED rates that will apply from 1 April 2014. By making this improvement, it is possible for Her Majesty’s Treasury to amend the VED rates to reduce the number of vehicles paying over £300 more to just one vehicle. Even this additional cost represents less than 0.4% of the annual cost of running an HGV, which is normally in the range of £80,000 - £100,000.
There is no change to figures quoted in Parliament of 94% of vehicles paying no more than now, and 98% paying no more than an additional £50 per year, as a result of these changes. The Department for Transport will be republishing the full updated analysis on the consultation pages for charging heavy goods vehicles hosted on the GOV.UK website.
The updated analysis will enable vehicle operators to see the revised details of how much will be paid for each type of vehicle.
These figures will remain provisional, until Her Majesty’s Treasury confirm the new table of rates in the ‘Overview of outstanding legislation and rates’ document accompanying Budget 2014.
This once again reinforces the government’s commitment to introduce the HGV Road User Levy in April 2014 at as minimal a cost to the UK haulage industry as we can realistically deliver.