Thursday, March 20, 2014

Road Haulage and Freight Interests Express Disappointment at the Budget Fuel Duty Policy

Government Could Have Gone Further According to Industry Lobbyists
Shipping News Feature

UK – With just one Budget left before the next general election there were bound to be some more eye catching policy moves than the simple suspension of the duty rate change on fuel which the road haulage sector had been crying out for and duly promised. After ramping up the pressure, as we reported last week, representatives of the industry such as the Freight Transport Association (FTA) and the Road Haulage Association (RHA) were not as happy about the savings to the industry as one might have expected.

Whilst welcoming the freeze in duty, the FTA sounded disappointed that the Chancellor had not seen fit to reduce the tax on fuel after it had specifically requested he examine the possibility of doing so. According to FTA figures it is estimated that every penny of fuel duty costs commercial vehicle operators £116 million a year, and a 3 pence per litre cut would have saved around £350 million a year for an industry that all British businesses rely upon. James Hookham, FTA Managing Director of Policy and Communications said:

“The Chancellor has kept his promise to freeze fuel duty and industry will be £187 million a year better off for that, but he missed the opportunity to stimulate the economy further by reducing fuel duty and putting around £690 million into the pockets of families and British business. This could have given a further stimulus to the economy and locked in the positive growth already achieved.”

The FTA says that according to studies by the National Institute for Economic and Social Research (NIESR) and Centre for Economics and Business Research (CEBR), the UK economy would benefit from such a duty reduction by generating at least 70,000 jobs, increasing GDP by 0.2% and helping lower inflation. The announcement that the fuel duty rise planned for September would not happen came as no surprise, it was announced that this would be frozen for the duration of the current Parliament back in November last year, and the RHA says it feels the road freight industry, the sector it terms that ‘physically moves the economy’, seems to have been largely forgotten. RHA Chief Executive Geoff Dunning commented:

“While proving positive for the manufacturing and export sectors, today’s Budget brought little encouragement for UK hauliers. Of course we welcome the introduction of legislation to give new tax and borrowing powers to the Welsh Government to fund improvement to the M4 in South Wales. We also welcome the news that business rates, discounts and enhanced capital allowances will be extended in enterprise zones for another three years.

“As far as we are concerned if you are a gambler or a drinker, today’s Budget brought good news. However, for the UK haulier, currently paying the highest level of fuel duty in Europe, there was scant encouragement. We were buoyed up at the pre-Budget announcement that the Chancellor had some ‘surprises’ up his sleeve. Sadly, they did not include a cut in fuel duty, the thing that our industry so desperately needs.”