EU Threatens UK Over HGV Levy

I stay away from the EU debate on this blog because there are wide ranging arguments from those who want us to stay ‘In’ and those who want us to get ‘Out’.

However this particular item affects most of us because the majority of food and other goods in Britain is transported by road. There are approximately 442000 commercial trucks operating on UK roads run by about 103000 operator licence holders. They feed the key channels to market in transporting almost all products for retailers, manufacturers and distributors, whose supply lines have become much more international in scope.

Some background information:

The cost of commercial road transport is a key element in determining the competitiveness of retailers and manufacturers that make up UK plc. Fuel costs can represent over 30 per cent of articulated vehicle costs and fuel duty is a large element of this. In the UK fuel duty is more than twice the average level of other states in Europe. In addition, the enforcement of legislation covering commercial vehicles and their minimum operating requirements is lower across Europe than it is in the UK. This can also impact on fair competition.

UK Fuel Excise Duty rates – all figures quoted to 1 decimal place

Fuel type (used as road fuel) Fuel duty
(Jan 2011 – 22 Mar 2011)
Fuel duty
(23 Mar 2011 – Sept 2017)
Ultra-Low Sulphur Petrol 59.0 p/litre 58.0 p/litre
Ultra-Low Sulphur Diesel 59.0 p/litre 58.0 p/litre
Biodiesel 59.0 p/litre 58.0 p/litre
Bioethanol 59.0 p/litre 58.0 p/litre
Liquefied petroleum gas 33.0 p/kg 31.6 p/kg
Natural gas 26.2 p/kg 24.7 p/kg
Electricity Zero Zero

http://www.nextgreencar.com/car-tax/fuel-duty/

Brussells Officials are planning to present the UK before the EU courts for charging foreign HGV drivers a levy up to £10 a day.
The HGV levy was introduced 2 years ago to help ‘level the playing field’ for UK hauliers and ensure foreign drivers and UK drivers are treated equally, yet, the EU declare that it is unfair towards foreign drivers, penalizing them for trade within the UK.

The HGV levy was described by Patrick McLoughlin as a “massive boost” to British hauliers under pressure from foreign rivals. It was designed to compensate for levies and tolls that British trucks pay when travelling overseas that do not exist in Britain. That, the government argued, makes it harder for British firms to do business on the continent than it is for their rivals to do business in the UK.

Under the policy, all HGVs, British and foreign, pay up to £10 a day to use the roads. But this is then discounted from vehicle excise duty, meaning that in effect British-registered drivers are no worse off while foreign truckers are hit.

Officials refuse to publically comment on the court case until after the EU referendum, believing it may have an impact on the results.

A leaked letter from Jean-Claude Juncker’s powerful chief of staff ( Dr.Martin Selmayr) reveals plans to launch infringement proceedings against the government over a new HGV levy which is claimed to breach EU laws around equal treatment. It will provide ammunition to Brexit campaigners, who argue that European law is tying the hands of ministers on a range of policy areas.

If Britain does not change its policy, it could be hauled before the European Court of Justice which has the power to impose fines of millions of pounds if rulings are not complied with.

A spokesman of the EU responded to the allegations within the letter, which was leaked by a German Magazine. In a public statement, he announced ‘The commission does not comment on rumours in the press.’ Once again demonstrating the EU refuse to publically comment on this topic until after the referendum takes place, aware of the implications it may have among UK voters.

Please note; I will not publish comments about whether Britain should stay in the EU or leave.  The issue here is the threat to British hauliers and fair or unfair competition.

 

Further reading:

http://www.fta.co.uk/_galleries/downloads/email_news/burns_inquiry.pdf

http://www.telegraph.co.uk/news/2016/04/24/eu-threatens-legal-action-over-british-lorry-tax/

https://www.returnloads.net/news/eu-threatens-uk/

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One Response to EU Threatens UK Over HGV Levy

  1. Insider. says:

    British hauliers and drivers have to pay charges and tolls to drive on most European roads so it is not difficult to understand why HMG introduced the HGV levy. There is also one crucial difference;
    European countries do not impose VED. In France drivers pay tolls depending on the distance travelled and Austria and Switzerland charge road tolls.
    Eu hauliers pay less for fuel and pay lower wages therefore it is not IMV a ‘level playing field’ for British hauliers.

    “A scheme for HGV road user charging cannot discriminate between UK-registered vehicles and vehicles registered elsewhere in the EU. It will therefore apply to both UK and foreign-registered HGVs. It must also comply with the Eurovignette Directive (Directive 1999/62/EC as amended by 2006/38/EC and 2011/76/EU) which sets out a framework of rules for tolls and charges, including maximum daily rates for the latter”.
    http://www.racfoundation.org/media-centre/lorry-road-user-charging#sthash.4kKpWWv9.dpuf

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