Monday, November 23, 2015

All Road Haulage and Freight Transport Guns Aimed at the Chancellor

Fuel Protestors Insist Report Shows Their Case is Now Proven
Shipping News Feature
UK – The Chancellor of the Exchequer came under pressure last week from a range of interests, representing both the man on the street and road haulage operators, with the release of a report commissioned by FairFuelUK and part funded by the Freight Transport Association (FTA), which has prompted an industry wide cry that raising in fuel duty is disadvantageous to the economy. The report, published by the Centre for Economic and Business Research (CEBR), claims that the lower petrol and diesel prices of 2015 have raised UK GDP by 0.6%, created an extra £11.6 billion of economic activity, 121,000 jobs and boosted government tax revenues.

The research also claims that raising duty on diesel or increasing VED on diesel vehicles would cost businesses and families £9.3 billion across the current Parliament and the data, as published, also demonstrates that the suspension of the government fuel duty escalator has increased tax revenues to the Exchequer by a net gain of £1.3 billion. Had the fuel escalator been in place the extra burden to the economy would have been £4.9 billion.

Earlier this month the FTAs submission to the Chancellor ahead of his Autumn Statement, called for a 3p per litre reduction in fuel duty to ease cost pressures on domestic road freight, stimulate economic growth and create jobs. FTA Deputy Chief Executive James Hookham said:

“The Chancellor’s Autumn Statement on 25 November will be the biggest test of George Osborne’s commitment to economic recovery for years. The link between fuel prices and growth was confirmed by the Treasury’s own modelling last year and now CEBR’s evidence, part-funded by FTA, shows just how big the gains were and the economic folly of resorting to fuel duty or VED increases in order to balance the books or supposedly ‘punish’ users of diesel fuel. With economic growth slowing this year, the Chancellor needs to listen to the numbers not the slogans.”

The Road Haulage Association (RHA) also welcomed the report and pointed out once again the chronic shortage of qualified drivers which is currently blighting the sector. RHA chief executive Richard Burnett observed:

“We are pleased that the FairFuelUK-commissioned research confirms that this year’s low oil and fuel prices have resulted in an increase in business investment, lower production costs and improved household spending across the entire UK economy. But if these important improvements are to be maintained, it is crucial that the Chancellor announces a fuel duty cut in his Autumn Statement.

“If the UK haulage industry is to continue delivering daily life to every household, we need to get an extra 45,000 to 50,000 drivers behind the wheel. To achieve this the industry needs £150 million of government funding to be paid directly to UK hauliers to support an emergency programme of training. Moreover, we can clearly demonstrate that the Chancellor will be able to nearly double his investment.

“This emergency funding would be self-financing for HM Treasury, the new driving jobs would not only generate additional income tax and national insurance; the need for additional trucks could generate up to £275 million in fuel duty revenue. In addition, the extra investment in UK skills would reduce the industry’s reliance on drivers from abroad, which the RHA estimates leads to approximately £180 million per annum being sent back to drivers’ home countries. This is money that would otherwise be spent in the UK, supporting employment and generating VAT.”

At 57.95 pence per litre, UK-registered hauliers pay by far the highest levels of diesel duty in the EU. In Luxembourg, where many international transport firms draw fuel, the duty level is only 23 pence per litre. Even net of the one-off investment in training called for by the RHA, UK hauliers will still be paying by far the highest duty level in the EU. CEBR Director Oliver Hogan said:

“While the continuation of the fuel duty escalator would have brought in additional indirect taxes over the past year, the Government would have been trading off the boost to economic activity and jobs for increased tax revenues. Given the fragility of the economic recovery, this would in hindsight have been an unwise policy.”

Meanwhile, FairFuelUK principal commissioners of the report, believe that the Volkswagen scandal might cause Mr Osborne to increase tax levies on diesel usage by way of a reaction. FairFuelUK’s campaigner Quentin Willson, remarked:

“This landmark report completely destroys the myth that high fuel duty levels increases government tax receipts. We’ve proved that keeping duty low actually increases revenues into the Exchequer by improved economic activity, more income tax, NI, Corporation Tax and VAT. The government must now do everything in its power to lower fuel duty as well as making sure fuel retailers pass on oil price savings to businesses and consumers. Our future economic strength depends on this policy.”

All parties are adamant that the report offers conclusive proof that their arguments to make the carriage of freight by road cheaper by restricting fuel and running costs have been correct all along. Howard Cox, Founder of FairFuelUK said:

“George Osborne should look at this data very carefully indeed. We’ve provided clear evidence-based proof that lower transport costs of 2015 have significantly benefitted everybody, including the Treasury and there’s now no argument left not to reduce fuel duty. Any plans he may have to penalise drivers for using diesel cars, vans and trucks will backfire badly and hit businesses and families with a shocking £9.3 million bill.”