CONSULTATION ON REFORM OF VEHICLE EXCISE DUTY FOR LORRIES

Purpose

1.1 The Government published its ten-year plan for transport, Transport 2000 – The Ten Year Plan, in July 2000. It set out the Government’s long-term strategy for delivering a quicker, safer, more punctual and environmentally friendly transport system.

1.2 Lorries are a significant source of: a. Greenhouse gas emissions, which cause climate change; b. Local air pollutants, which can damage health and make life in towns and cities unpleasant; c. Track cost, which increases the cost of maintaining the road network; and d. Noise, which can be intrusive.

1.3 The Government believes that tax can and should be used to promote environmental objectives. However, the Government believes that this must be done in a fair way and in a manner that does not hinder UK businesses’ international competitiveness. The Government’s position towards environmental taxes was set out in more detail in its Statement of Intent on Environmental Taxation, published in July 1997. This is summarised in section 2.

1.4 In Budget 98, the Chancellor announced a review of the existing system of Vehicle Excise Duty (VED) for lorries. To inform this review, the Government commissioned the National Economic Research Associates, AEA Technology and The Transport Research Laboratory to produce a report on lorry track and environmental costs (referred to as the NERA report). This report was published in April 2000.

1.5 The Government has considered the NERA report and has listened to the haulage industry both in the Road Haulage Forum and in bilateral meetings. The Government greatly values the dialogue it has established with the haulage industry and hopes that it will continue during and beyond this consultation process.

1.6 The purpose of this document is to allow all interested parties to comment on the proposals to reform lorry VED set out over the following pages.

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CONSULTATION ON REFORM OF VEHICLE EXCISE DUTY FOR LORRIES (667KB)