March/April 2005

The UK Government looks determined to press ahead with implementing a lorry road-user charging scheme based on telematics, despite rising voices of concern in industry - and despite a Transport Select Committee report that raises wide-ranging questions about the wisdom of current proposals. And lorry operators may end up having to foot part of the bill.

However, Heriot-Watt university, which has championed a potentially simpler and cheaper system, has scored a success by gaining access under the Freedom of Information Act to a document outlining why HM Customs & Excise has rejected its scheme. And in a swift rebuttal, it has challenged or discounted most of HMCE's criticisms.

The authors of the new Select Committee report, Road Pricing: The Next Steps, criticise the Government for relentlessly pressing ahead with its telematics-based LRUC scheme, despite not knowing what it will actually cost.

"While we support the objectives of the Lorry Road User Charge," they conclude, "we have concerns over the type of system being pursued. The cost-effectiveness of the scheme will not be known until the technological solution is determined. Ultimately the sums may not stack up."

 

That prospect was admitted by Mike Shipp of HMCE at this spring's FTA Summit conference, where he was asked if he could guarantee that operators would not have to contribute to the cost of the Government's chosen LRUC scheme (due to be announced later in the year). His bottom-line response was: "No, I can't."

The Government's commitment to a technology-based system is confirmed in its separate report, Regulatory Impact Assessment: Lorry road-user charge. This appears at first sight to consider the alternative of a so-called "manual" distance-based charging scheme, as advocated by the team at Heriot-Watt (among others); but actually it discounts this option fairly comprehensively.

It says a manual distance-based scheme "would involve significant set-up costs, particularly to establish the back-office systems and infrastructure," and repeats its concerns about "a substantial administrative cost on hauliers and the Government." It also argues that it would be very difficult to police the scheme at borders, especially in Ireland.

However, the report skirts the question what a telematics solution would cost, merely saying the figure "might be greater than for a manual system", while claiming that the ongoing administrative costs for hauliers "will be substantially lower." Because the procurement process is still ongoing, it argues, "it is not possible at this stage to set out the detailed costs for LRUC."

Heriot-Watt, in its Alternative Method of Road User Charging for Lorries: Response to Feedback, strongly rejects any thought that costs might be broadly comparable, citing previous analysis showing that a technology solution would be "an order of magnitude higher". It implicitly derides HMCE's determination to compare the carefully-structured Heriot-Watt proposals (which HMCE describes as showing "Luddite tendencies") with as-yet indeterminate technological alternatives, while emphasising that it supports the roll-out of "appropriate technology at the right time".

It accepts the difficulties over the Irish border issue, but says this would affect a telematics solution as well, and argues that the only real solution is to defer implementation of any system in Ireland.

The Freight Transport Association, which seems increasingly disenchanted with the current turn of events, has expressed puzzlement with these two opposing views. According to chief executive Richard Turner, the difference between them "will do nothing to stimulate confidence that the primary benefit of Lorry Road User Charging - namely to decouple fuel duty between cars and commercial vehicles - will actually be delivered."

The Customs & Excise report concludes that the Government "will consider the costs in detail when assessing the business case for the potential solutions," but leaves little doubt that by "solutions" it means the various technology options. The manual approach seems nowhere on its agenda.

One positive glimmer in Mike Shipp's conference presentation was his acknowledgement that original equipment makers' commercial telematics systems might be acceptable for LRUC purposes, providing there was no interference between the two functions.

The FTA seems to be taking consolation from the thought that its independently-commissioned LRUC study by PricewaterhouseCoopers, if cautionary in stance, may carry some weight with the Government, but there is little indication at the moment that anything will deflect it from its present commitment to the technology route.