July/Aug 2005

Mixed reactions have been expressed to the UK Government's decision to drop plans for its controversial telematics-based Lorry Road User charging scheme. Transport Secretary Alistair Darling announced that the scheme was being abandoned in a parliamentary statement on 5 July.

Few trade associations or other representative bodies have reacted positively to the development, although several have admitted there were flaws in the proposed scheme. But there have been wide-ranging complaints that one of the scheme's avowed objectives - to level the fuel duty playing field for foreign operators - is not now being pursued by the Government.

In response to this perceived vacuum, the Freight Transport Association and the Road Haulage Association have already joined forces to mount an industry-wide inquiry into alternative ways of achieving the same result.

The mixed reactions are summed up in a statement by Roger King, chief executive of the RHA, who commented: 'The LRUC concept was not perfect, but it had the potential to deliver a fuel duty rebate and charging regime for foreign lorries.'

 

He went on to demand: 'Can we allow these lorries to use our roads in increasing numbers without paying a single penny for their use?'

The FTA has described the decision as 'short-sighted, irresponsible and careless of the UK transport industry's competitiveness problems with the rest of Europe', and chief executive Richard Turner said it was 'a breach of faith by Government'.

Other operator organisations have take a similar view. The British Vehicle Leasing and Rental Association, for instance, has called the decision 'blatantly discourteous'.

Yet anecdotally, transport businesses on the ground have not expressed the same enthusiastic support for the scheme. Whilst embracing some of its objectives, many have told us privately that they questioned the merit of adopting such a complex, untested system to achieve them.

The telematics industry itself is expressing mixed reactions. Those companies that were involved in bidding for the contract to run the system are understandably disappointed, but also hesitant to attribute blame.

Martin Port, head of Masternaut, says his position is 'not negative', and is adamant that the consortium in which he was bidding, which included IBM and Serco, could have come up with a viable solution.

'There will eventually be some form of road user charging, and we will play a part in it,' he told us. 'We're putting everything necessary in place to be a party to any bid.'

By contrast, Craig Sears-Black of Isotrak told us his company 'is not sorry that the programme has been terminated from a technological point of view.' He says it would have been 'massively expensive to implement, and would have taken substantially longer than the target timelines being discussed.' While commending the scheme's original vision of creating a standard, industry-wide telematics technology platform, he says that under the later proposals, 'we do not believe the project would have ever delivered on this vision,' and instead would have distorted the market.

Meanwhile, the team at Heriot-Watt university who championed a much cheaper proposal has been celebrating a victory for common sense. Professor Alan McKinnon became a notable scourge to the Government on the matter, repeatedly demanding information from HM Customs & Excise on its proposals, and invoking the Freedom of Information Act when this was not initially forthcoming. But he modestly declines to claim credit for the Government's volte face, merely saying it was prompted by 'a number of factors'.

The inquiry launched by FTA and RHA aims 'to update and review the evidence of the effects of high fuel duties on UK transport operators, businesses and the economy.' It is being headed by Robbie Burns, former group managing director of NFC, and the FTA says £100,000 has already been allocated to it.

The inquiry intends to seek the views of members and non-members, academics, other trade organisations 'and any other individuals or groups interested in the matter'.

What happens now?

In announcing the abandonment of the LRUC scheme, Transport Secretary Alistair Darling said: 'It is right for us to take forward the plans for distance-based lorry charging as part of the wider work on national road pricing - to work for a single comprehensive, cost-effective system.'

This has been taken to mean that there will be no separate scheme for freight operators, who will have to wait until 2015 or 2020 for a comprehensive scheme to emerge. This is the timetable previously announced by the Government for its universal road user charging scheme.

There is also no mention of 'decoupling' lorry and car taxation systems - another objective held dear by organisations such as the FTA.

Darling's statement made no mention of any alternative scheme to level the fuel duty playing field, and there has been no further statement on this matter - an omission that has incensed the FTA and the RHA.

The abandonment announcement was buried in a parliamentary statement that was ostensibly launching a new an £18 million to support congestion-busting measures by local authorities. Darling said up to £200 million could eventually be available for this.