Fuel duty cuts demanded by RHA and FTA

Published: 03 October 2018

Fuel duty cuts demanded by RHA and FTA
Both the Freight Transport Association and Road Haulage Association have stated their position on Chancellor Phillip Hammond’s budget statement set to be delivered on the 29th of October. They have called on the chancellor to cut fuel duty during the statement at the end of the month.

The RHA feels the government should give an “essential user rebate” of 15 pence per litre, in an effort to make UK businesses more competitive in the market. The FTA also stated a 10p per litre cut would improve economic activity by around 1% within the first year.

While the RHA gave their submission, chief exec Richard Burnett spoke on the matter: “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.”

The FTA’s head of policy, Christopher Snelling also had his opinion heard: “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,”

He continued: “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.”

In addition to this, the RHA also mentioned the concerning state of Britain’s roads and that the government need to put more of an effort into repairing them when damaged, address the industry’s unanswered concerns regarding customs and movement in/out of Europe and give an idea of  how Brexit will impact national trade. They also stated the sector needs support, funding and further resourcing to combat the HGV driver shortage which is said to be at 45,000.

Meanwhile, the Food Storage and Distribution Federation have their own demands during the budget statement at the end of the month, requesting that the chancellor maintain the use of red diesel in on-vehicle units that help keep food supplies cool and secured while on the move. They expressed that a change to the current laws could lead up to £100 million in costs.

Shane Brennan, chief executive of the company spoke regarding this: “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.”
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