Thursday, August 1, 2013

Road Haulage Lobby Presses for Extension of Fuel Rebate for Freight and Private Interests

Government Proposals to Extend Reduced Duty Scheme for Remote Communities Falls Short for Logistics Industry
Shipping News Feature

UK – Today’s announcement by HM Treasury that it was proposing to extend the 5 pence per litre fuel rebate, currently only available to island communities, to remote areas of the mainland, received a muted response from the freight and road haulage communities.

Both the Freight Transport Association (FTA) and the Road Haulage Association (RHA) were quick to call for the cut in duty to apply to the entire country despite being pleased that today’s proposals would help stimulate growth in the rural economy. The fuel duty discount pilot scheme for remote island communities was introduced in March 2012, and applied to the Inner and Outer Hebrides, the Northern Isles, the islands in the Clyde and the Isles of Scilly and the latest move comes after the Treasury asked 1,500 retailers in thirty six counties to provide details of prices they charge for petrol and diesel, before seeking permission from the European Commission (EC) to extend the rebate scheme.

An expanded scheme will require approval from the Commission and other Member States. The government aims to submit an application and evidence base in support of the scheme expansion over the autumn. The RHA and FTA have been at the forefront of the FairFuelUK campaign which has lobbied for the past two years on behalf of the logistics sector and private motorists. James Hookham, FTA Director of Policy and Communications commented:

“Today’s announcement by the Treasury is clear recognition that the government accepts the need for a cut in fuel duty. The proposed ‘rural’ 5p per litre cut will obviously help the UK’s rural economy, but FTA strongly believes that this should not be introduced purely in rural areas but insists it should be applied across the country. If 5p a litre cut will stimulate the growth in rural areas, just think what it could do if applied across the country.

“FTA has long campaigned for a cut in fuel duty as a way help encourage growth in the economy. We know from our members that spiralling fuel costs are bad for businesses, hauliers and road users, and can have a devastating impact on haulage businesses, their customers and ultimately everyone through the prices on the shelves.”

The RHA joined forces with the Scottish National Party to press for the fuel duty discount pilot scheme for remote island communities, and also believe that other far flung mainland communities would benefit from similar treatment but RHA Chief Executive Geoff Dunning, pointed out anomalies in the current proposals, saying:

“We have reviewed the list of counties and districts that are under consideration for a duty reduction and find it bizarre that, for instance, while Devon is considered to be remote, Cornwall is not. Similarly, while the Isle of Anglesey is considered remote, the Isle of Man is not.

“In 2011/2012, the total tax take from UK road users amounted to £58 billion, of that, over £36 billion is from fuel duty and VAT on fuel. Surely if, as already stated, these proposed rebates are to help boost the economy, there can be little excuse not to reduce fuel duty across the board. A 5 pence per litre cut in fuel duty would equate to a £2,000 per annum reduction for a road haulier operating a typical 44 tonne articulated truck. The long term knock on effects of this would far outweigh any temporary Treasury loss and would ensure the financial stability the economy so desperately needs.”

In a statement released today outlining the details of the government’s proposals, Chief Secretary to the Treasury Danny Alexander said:

“The island fuel rebate provides much needed help to keep down fuel prices in areas where costs of transporting fuel mean prices are much higher. I know that there are other remote rural areas of the UK with similarly high fuel costs, so we are today starting to gather further evidence that will form part of an application to the Commission to extend the island fuel duty discount scheme to very remote rural areas.

“We will need to prove that there are areas which are similar to the islands in terms of pump prices and distribution costs, so I would urge local areas that may qualify to provide the information we need to make the case as robust as possible. As a Highlander, I know that for people who live in rural areas driving is not a choice, but a necessity. So while it won’t be easy to get this agreed with the Commission, I want to do everything I can to make this happen.”

Photo: Broadford Filling Station, Isle of Skye courtesy of John Allan.