Haulage costs set to rise for Scottish islands

Edinburgh: Scrapping the Road Equivalent Tariff (RET) for lorries threatens freight’s vital role in Island life, warns the Freight Transport Association.

Scrapping the tariff for lorries that use ferry services to move goods between the Western Isles of Scotland and the mainland will increase transport costs and stoke inflation in those island communities, the association says.

The tariff sets ferry fares to the equivalent cost for vehicles travelling the same distance by road and in 2008 a pilot scheme was introduced for the Western Isles, Coll and Tiree.  But from April lorries will not be included in the scheme, which will continue for cars, coaches and small commercial vehicles under 3.5 tonnes.

Christopher MacRae, the FTA’s head of policy in Scotland, says: “Ending RET for lorries is bad news for operators and the island communities themselves.  It will increase transport costs further and, if these costs are passed on, it will see the cost of living rise too.  RET was introduced to boost the local tourist trade and island economies, and it has been widely acknowledged that in this respect it has been very successful, but let’s not underestimate the vital role that freight has played in the success of island life.  In the current economic climate, threatening inflation to Scotland’s tourist industry is a grave misjudgement.”

RET will be replaced by an enhanced discount scheme offering up to 25% discount on ferry fares (up from the pre-RET maximum level of 15%).  It is also intended that the new larger commercial vehicle discount scheme be made more inclusive than its predecessor to avoid bias against small to medium volume users.  It is intended to implement the scheme by the end of March to coincide with the ending of RET. Further, it is understood there may be transitional arrangements.

MacRae says: “It is understood that the new lorry discount scheme will not apply to occasional users, and even with a 25 per cent discount, costs to larger commercial vehicles will increase by over 100%.

“Budgetary pressure is cited by Scottish Government as the reason for the financial cutback of RET for lorries, and we understand that the proposed new lorry discount scheme will not be extended to other routes.  Yet RET will be extended for cars, small commercial vehicles and coaches to inter island services across the Sounds of Barra and Harris and there will be further RET pilots but again lorries are not included.  It is also planned to extend RET to other West Coast and Clyde islands, but again not for lorries.  FTA has written to the Minister for Housing and Transport expressing our dismay and concern at these decisions.”

A copy of the report is available.