The Committee expressed support for the objectives of LRUC, but has 'concerns over the type of system being pursued'. It tells the government to be 'wary of committing itself to implementation of a potentially very expensive and overly-sophisticated system'. Given 'the risk that millions of pounds of tax payer's money could be unnecessarily wasted', it recommends that, once the current LRUC procurement process is completed (towards the end of this year), 'the Government should undertake objective comparisons of the different solutions…., using a standard set of criteria such as cost effectiveness, risk of fraud, burden on industry and technical robustness'.

The need for such an objective comparison is highlighted by the other two reports. The second is the government's 'Regulatory Impact Assessment: Lorry road-user charge', whose publication virtually coincided with that of the Select Committee report, despite the fact that paragraph 113 of the latter report states that 'the Economic Secretary to the Treasury told us that a Regulatory Impact Assessment would not be carried out for the Lorry Road User Charge until the technological solution had been decided and substantive legislation was produced'.

The third report has been written by David McClelland and myself to address the criticisms that have been levelled at the alternative method of road user charging for lorries which we advocated last July. This alternative method has generated a good deal of discussion in the trade press and at conferences. Most of the feedback we have received has been positive and supportive, though our attention has also been drawn to a number of potential shortcomings. The most thorough, and negative, critique of our proposed system has been undertaken by Customs and Excise. Their review document was originally intended solely for internal use by government officials. Under the terms of the Freedom of Information Act, however, we were able to obtain a copy of this document.

The government's Regulatory Impact Assessment report contains a comparison of the benefits and costs of 'manual' and 'automated' systems of road-user charging for lorries. The review of the manual scheme is essentially a summary of the Customs and Excise critique of our alternative method (soon to be published by the Transport Select Committee), though no explicit reference is made to our proposal. The automated system is the much more technologically-sophisticated option currently favoured by the government and involving vehicle tracking.

The use of the terms 'manual' and 'automated' are very misleading. As we explain in our report, online registration, scanning devices and computer terminals would be extensively used in our system to minimise the amount of manual intervention and paperwork. Moreover, an LRUC system involving vehicle tracking would require a significant amount of manual control in the operation and maintenance of on-board equipment (OBE).

We also consider this comparison of the 'manual' and 'automated' systems to be strongly biased in favour of the latter. Points relating to the manual system are divided into 'benefits' and 'costs'. The 'so-called' benefits, however, are merely a list of shortcomings, giving the impression that there would be virtually no advantage in opting for a simpler system. As we try to demonstrate in our report, most of the criticisms of our method are unfounded or can be adequately addressed by practical modifications to our original proposal. We take issue, in particular, with four claims made in the government's report:

• It suggests that 'the cost of the automated scheme might be greater than for a manual system' (p.18) (our emphasis). Given the experience of electronic road tolling systems for trucks elsewhere in Europe, there is no doubt that an 'automated' LRUC scheme, with the capability of meeting the operational requirements set out in the government's Procurement Prospectus, will be an order of magnitude more expensive than our proposed system.
• The document also argues that 'the general level of risk associated with an automated system is expected to be lower than the risk posed by manual schemes' (p. 18). This claim cannot be substantiated at this stage. In our report we explain how the risk of non-compliance could be minimised within our system. A telematics-based LRUC 'solution' would be exposed to many different types of risk, including malfunctioning of OBEs across the UK road fleet of 430,000 lorries plus tens of thousands of foreign trucks, tampering with OBE, vehicle tracking errors in the GPS / microwave systems and the host of possible problems than can hamper the development and installation of large new computing and communication networks.
• It claims that 'the Irish Land Border poses specific problems' (p.15) for the manual system but offers no explanation of how the 'automated scheme' will deal with these problems. As we discuss in our report, the Irish border will, for the foreseeable future, present serious problems for any system of road-user charging and will only be satisfactorily resolved when the whole of Ireland is subject to the same system of distance-based charging, probably within the context of an EU-wide tolling system.
• It is asserted that 'an automated scheme also represents the best opportunity to be interoperable with other countries' tolling systems' (p.18). This assumes that the LRUC system to be adopted in the UK at the end of this year (when the current procurement process is completed) will be compatible with those in other European countries. The three lorry road charging schemes currently in operation, in Germany, Austria and Switzerland, are quite different and offer very limited inter-operability. Only when EU standards for electronic tolling of trucks are agreed, probably not for several years, will true inter-operability be achieved. By delaying the introduction of an electronic, tracking-based system of tolling until it is actually required, 10 years or more from now, the UK could ensure that its system was fully compatible with EU standards. We have proposed our alternative method as a cost-effective means of reforming lorry taxation in the intervening period.

In my opinion, the comparison of the two methods of lorry road-user charging contained in the 'Regulatory Impact Assessment' report has little credibility. Although the report states that the government 'has not specified what the technical solution for LRUC would be' (p.19), it is clearly committed to a telematics-based charging regime involving vehicle tracking. Only a system with this degree of technological sophistication will be able to meet the operational requirements specified in the procurement prospectus. The government therefore has a strong vested interest in portraying any alternative, low-tech system in a negative light, despite the fact that it could meet the main, declared objectives of road-user charging more cheaply and easily. Its latest report on LRUC demonstrates the need for a truly objective, independent and wide-ranging assessment of the different approaches to road-user charging for lorries, as recommended by the House of Commons Transport Committee.

House of Commons Transport Committee: 'Road Pricing: the Next Steps.' Seventh Report of Session 2004-05. HC 218-1

HM Treasury, HM Customs and Excise and Department for Transport 'Regulatory Impact Assessment: Lorry road-user charge'

A. McKinnon and D. McClelland 'An Alternative Method of Road User Charging for Lorries: Response to Feedback' Logistics Research Centre, Heriot-Watt University.

A.McKinnon and D. MeClelland 'Taxing Trucks: An Alternative Method of Road User Charging' Logistics Research Centre, Heriot-Watt University. (July 2004)