Thursday, May 20, 2010

Shipping And Trucking Tax Rises Cause Concern

Government Urged to Confer Before Changes Initiated
Shipping News Feature

UK – The new coalition government have made clear the necessity and intention to reduce the country’s deficit by all means available – much to the concern of representatives across the spectrum of the shipping industry, particularly those with air freight and haulage interests.

The British International Freight Association (BIFA) this week expressed concern that the “per plane” tax under consideration by the authorities as a replacement for the current Air Passenger Duty, will impinge on British cargo trade by causing plane operators to move to European hubs outside of the UK. BIFA point out that such a scheme was considered, and discarded, by the last administration. The current scheme is marketed as a ‘Green’ tax by government although not viewed as such by BIFA, who say revenues currently derived from APD, and conceivably a replacement plane tax, are not directed towards funding environmental improvements.

As far as haulage contractors are concerned they are becoming battle weary after facing a raft of fuel increases in the recent past. Both the Road Haulage Association (RHA)and the Freight Transport Association (FTA) have campaigned tirelessly against what they say the government views as a ‘soft’ target, namely drivers, with the effect on the country’s trade being ignored.

The RHA have called for “the cancellation of the inflationary increase in fuel duty announced by the previous Government while in the medium term, stabilising the price of fuel and to bring diesel duty levels into line with those elsewhere in the EU.”

For their part the FTA pointed out the inequality for native drivers when faced with competition from foreign firms carrying large quantities of cheaper fuel from the continent. Simon Chapman, FTA’s Chief Economist said:

“Politicians should be looking at where they can recoup relatively easy money. A system to limit the amount of fuel able to be brought in from across the channel would bring in almost enough cash to build a brand new hospital every year, yet none of the political parties seems to have the appetite to tackle this issue.”

Whilst on the air freight debate the FTA’s Christopher Snelling, FTA’s Head of Global Supply Chain Policy says:

“Superficially this is an attractive policy, but when you look at the detail it doesn’t work. Taxing by plane will not generate extra revenue or reduce emissions. Air services, especially freight-only ones, will simply relocate to continental European hub airports and goods will then be trucked across to the UK. The resulting loss of business will wipe out any gain to the Exchequer from the increased tax levels. And the goods will still be flying – but just with a longer road leg on the end.

“The net result for UK business will be increased costs, reduced service and greater unreliability – exactly the opposite of what internationally competing UK businesses, such as pharmaceuticals or technology, need.”

Freight trade associations fear that in the relentless drive to economise which everybody anticipates, once again the disjointed world of shipping will either be overlooked or viewed as an easy target by the authorities producing even more difficult trading conditions for Britain’s freight forwarders and supply chain providers.