Sunday, March 25, 2012

Budget Disappointing Say Freight Forwarding and Road Haulage Groups

Osborne Accused of Lost Opportunity
Shipping News Feature

UK – Having studied last weeks budget road haulage and freight forwarding lobby groups appear to have been singularly unimpressed by the Chancellors portfolio. Both the British International Freight Association (BIFA) and the Freight Transport Association (FTA) have sounded off on what they feel was a chance to assist those who carry the country’s vital supplies. The main bugbear is of course fuel and Peter Quantrill, BIFA Director General commented:

“It is disappointing that the fuel duty increase planned for August 2012 has not been scrapped in today’s Budget. Such a move would have sent out a very positive message from Government to businesses in our sector which operate on the tightest of margins and put us in a better position to both facilitate international trade and compete on a level playing field with foreign competition."

The Freight Transport Association was more damning in its criticism over the issue. The organisation is more haulier orientated than BIFA and it said quite bluntly that the Chancellor of the Exchequer's failure to cut fuel duty rates has condemned UK industry to suffer the consequences of even higher fuel bills and operational costs at a time when the world price of oil stands at a four year high, with every prospect of further price rises in the coming months.

By not cutting fuel duty, or even freezing it at current levels the FTA believes the proposed 3p per litre increase this August will prove crippling for many of its members with the organisation’s Chief Economist Simon Chapman saying:

"The Chancellor has squandered a very real opportunity to support UK industry, jobs and economic recovery, by his Budget policy on fuel duty. Independent research has shown that a cut in diesel duty of 2.5p per litre would have created an additional 175,000 jobs with no loss of revenue to the Exchequer. But, by contrast, the fuel duty increase of 3p per litre scheduled for August will increase the average cost of lorry operation by around £1,200 per vehicle per year – all on top of other price rises which are inevitable as a consequence of the current and anticipated increases in the world price of oil. Higher commercial vehicle operating costs inevitably impact on the price of everything we use or consume, and contribute to inflation and higher consumer prices.

"Mr Osborne has lost an opportunity to benefit every household in the UK and he must be persuaded to change his policy. FTA cannot accept this situation and will join with colleagues in the FairFuelUK Campaign with the intention of reversing this decision. In addition, the much heralded Fair Fuel Stabiliser has emerged as a damp squib. All it does is to formalise fuel duty increases above inflation if world oil prices fall below $75 per barrel. At the very least, what he should have done was to commit to freezing fuel duty when world oil prices were above $100 per barrel."

With fuel duty levels running above any other European country as detailed in our story last month the only bright spots for both representative bodies was the announcement that Vehicle Excise Duty levels for commercial vehicles will be frozen and the intentions of the Government to press through policies to increase exports and improve road and air freight infrastructure with Peter Quantrill adding:

“We are also pleased to hear that the coalition Government intends to double UK exports to £1 trillion this decade which would bring additional business to BIFA members. It is also positive that the Government is prepared to confront the lack of airport capacity in the south-east. We now look forward to hearing more about Government initiatives which will deliver on these announcements.

“We note that the Government will take forward many of Alan Cook’s recommendations for the roads, including developing a national roads strategy and setting a renewed focus on the level of performance expected from the Highways Agency. We also note that the Government will consider whether to go further and will carry out a feasibility study into new ownership and financing models for the national road network. BIFA will now look into how we can contribute to that study.

“However, it would have been nice to see more initiatives of specific relevance to our members’ business activities, recognising the important role of freight transport and international trade to the UK’s economic success.”