Hauliers threaten to pull out of UK over excise duty

THE GOVERNMENT was under growing pressure to back down over huge Budget tax increases on lorries, after the UK's second biggest haulier threatened to move its fleet out of the UK.

Wincanton Logistics said the move would involve 4,000 vehicles and save millions of pounds in fuel duties and road tax.

The move - known as flagging out - would allow it to take advantage of substantially lower rates of vehicle excise duty. VED for 40-tonne lorries is pounds 338 in Luxembourg compared with pounds 5,750 in Britain, increased in the last Budget from pounds 3,210.

The company said the Chancellor's decision to add another 6p a litre on diesel duty would add more than pounds 5m to its fuel costs.

It is currently calculating which European countries would give it the greatest savings. It said no final decision had been taken.

Robin East, director for European operations, said: "Wincanton, like the rest of the industry, is extremely concerned over the impact of the fuel duty escalator. Not only will it be crippling to the industry it will have major repercussions on the economy as the costs are fed through to the consumer."

Last week The Independent revealed that Eddie Stobart, the country's most famous haulier, had decided to flag out half of its 800-strong fleet to either Luxembourg or Belgium to save pounds 2m a year.

The moves came as the head of the Freight Transport Association (FTA) launched a vitriolic attack on the Government's policies, branding them "lunatic, crackpot, cock-eyed and ridiculous".

The FTA president, Lawrence Christensen, who is also head of logistics for the supermarket giant Safeway, said: "Our own government, which should be taking pride in our wonderful industry, spends its time thinking up ways of picking our pocket and complicating our operations."

He went on: "I think that the Chancellor and his advisers are either blind to our problems or incredibly careless and callous to our industry and its needs."

His comments will heighten speculation that Safeway is poised to flag out, although the company has denied it.

The FTA said an increasing number of its members were considering registering abroad. Spokesman Geoff Dossetter said: "There cannot be a transport manager in the country worth his pay who is not investigating whether he should flag out."

Truckers plan a mass protest in London on Monday, aimed at bringing the centre of the capital to a halt.

John Reid, the Transport minister, said he would meet haulage representatives to discuss their grievances. "We have to strike a balance between legitimate environmental concerns and the transport needs of the haulage industry," he said.

"But we firmly believe that the best way to help industry is to create a climate of sustainable economic growth and long term investment." He said road tax for 98 per cent of lorries had been frozen and hauliers had benefited from the Budget through lower corporation tax.