Tax on lorries fails to cover cost of road damage

British hauliers admitted yesterday that their tax contribution barely paid for the harm caused by their lorries.

British hauliers admitted yesterday that their tax contribution barely paid for the harm caused by their lorries.

Transport firms conceded that big trucks can cause up to £28,000 of damage each year but generate just £25,000 in fuel tax and vehicle excise duty. The figures were revealed in a government report compiled by three economic consultancies. But the hauliers insisted that they still paid too much tax.

Simon Chapman, an economist with the Road Haulage Association, said: "We do not have a problem with what is in the report but rather what is implied by it - namely that British hauliers are not paying their way.

"Haulage companies in the UK are being taxed out of the market compared with the rest of Europe. We are simply not competing on a level playing field."

French haulage firms were estimated to pay around £11,000 a year in taxes for every truck they own and Dutch hauliers contribute just £10,000 per vehicle. Mr Chapman conceded that road tolls in both countries generated extra funds for their respective governments.

Mr Chapman rejected suggestions that the cost of diesel on the Continent should now be brought into line with Britain to cover the cost of damage to the environment.

"At the end of the day, our members are running businesses but they are also providing a vital service," he added. "Raising prices throughout Europe would make all of us uncompetitive in a global market, deterring inward investment."

A spokesman for the Department of the Environment, Transport and the Regions denied suggestions that the Government had played down the significance of the report when it was published in June for fear of antagonising hauliers.

He said the purpose of the report was not to highlight the shortfall in contributions from hauliers, but to help estimate the cost of road repairs.

It was hoped it would help to provide the most cost-effective solutions to road maintenance, the spokesman said.

Tony Juniper, of Friends of the Earth, claimed the figures contained in the study - complied by NERA, a group of consultants, AEA Technology and the Government's Transport Research Laboratory - were an "under-estimate". The analysis failed to take account of the cost of congestion, accidents and climate change, he said.

"The policy response to this should not be to say British road taxes should be reduced but that those on the Continent should be increased," he told BBC Radio 4's Today programme. "We are clearly not paying yet the full environmental and social costs of trucking."

Jack Straw, the Home Secretary, said that all 19 members of the taskforce set up after the fuel crisis were in "strong agreement" over the need to ensure petrol supplies. He said legislation was a possibility.

Mr Straw expected that the group, made up of government representatives, senior police officers and oil company directors, would sign an agreement early next week.

The Home Secretary promised that tanker drivers would receive the "full backing" of the police if there was fresh disruption.

Mr Straw said: "There is no question that many of the drivers concerned felt intimidated. That was reported to us by both the oil companies and their union leaders.

"We have to take account of that and ensure that they feel safer at an earlier stage, in the case of future action, to make their deliveries."