The Road Haulage Association and Freight Transport Association have both called on Chancellor Philip Hammond to cut fuel duty when he delivers his budget statement on 29th October.
The RHA wants the government to introduce an ‘essential user rebate’ of 15 pence per litre in a bid to make UK businesses more competitive. The Freight Transport Association pointed out that a 10p per litre cut would increase economic activity by almost one per cent in a year.
Launching the RHA’s budget submission, chief executive, Richard Burnett said: “The Centre for Economics and Business Research (CEBR) estimates that a three pence per litre cut would add another £1 billion to UK GDP and create at least 8,000 more jobs.”
Christopher Snelling, head of UK policy at the FTA, said: ““Fuel currently accounts for around 31 per cent of the cost of running a 44 tonne truck. Our estimates show that a 1p increase per litre in diesel duty adds around £470 per year to the cost of running one truck. “The current rate of fuel duty costs the logistics sector £121m per penny of duty,” said Snelling.
“Rather than adhering to a policy of overly taxing one sector of industry, government would serve UK PLC better by cutting fuel duty to jump start spending and boost economic activity. A 10p per litre cut would increase economic activity of nearly 1 per cent in just one year, creating over a quarter of a million jobs. And while this may be a radical step too far for government, even a 3p per litre cut in fuel duty would still generate increased economic activity that would generate tax income to almost offset the cut in fuel duty.”
The RHA also wants the government to fix Britain’s roads, introduce efficient customs and control arrangements to manage post-Brexit international haulage, and for funding to help the sector address the HGV driver shortage – estimated at 45,000.
The Food Storage and Distribution Federation has also taken the opportunity to reiterate its call to the Chancellor not to remove the ability of food distributors to use red diesel in the on-vehicle units that keep food cold and safe as it travels through the supply chain. It reckons that such a move could cost the industry £100 million.
Chief executive Shane Brennan said: “Our food supply chain relies on a fleet of vehicles that keep our supermarkets, restaurants, hospitals, schools and markets stocked. For many operators diesel powered fridge units are the only reliable option. Removing access to red diesel will impose unavoidable cost and lead to price rises for consumers.”