The Freight Transport Association (FTA) has called for the government to make a reduction in duty increase on diesel in the order of 25p per litre, to bring the price of diesel for the UK transport industry down to a level more in line with the rest of Europe.
Following Tuesday’s protests by hundreds of lorry drivers in London and a two-mile line of lorries along the M4 towards Cardiff against the chancellor’s proposed duty increase on diesel of 2p per litre, the FTA has deemed the increase, planned for October, as unthinkable.
Fuel duty for diesel in the UK is 50p per litre compared with a European average of just 25p per litre. According to the FTA a reduction of around 25p is essential, due to the forthcoming liberalisation of EU regulations. The liberalisation will allow foreign vehicles to come to the UK to carry out haulage on a contractual basis at very much lower costs than apply to the domestic fleet, mainly due to the high tax burden on UK diesel.
Latest FTA research shows that due to lower fuel and labour costs, foreign lorries working in the UK are able to do so at between 10 and 15 per cent lower cost than UK operators working in the UK.
FTA director of policy James Hookham said: “[The] protest meeting in London gave a very fair representation of the problems experienced by the road transport industry as a consequence of high fuel taxation and growing oil prices. Those involved are to be applauded for their dignified and articulate description of the problems, and of potential remedies which include abandoning the proposed 2p per litre duty increase, arranging an early duty rebate for essential vehicle users, and redesigning future tax arrangements to decouple the way duty is charged on commercial vehicles from private cars...
“The current fuel price problems are further complicated by the threats to UK haulage from Brussels with the prospect of liberalisation of cabotage arrangements. New regulations are likely to allow foreign vehicles not only to work at far cheaper rates in the UK than can be achieved by the domestic fleet, but also to do so without the application of the UK Operator Licensing safety and maintenance regulations, which must be met by UK lorry operators and which have resulted in a good and improving safety record for these vehicles.
“The threat of increased and unfair foreign competition must be considered as great a problem to the commercial operation of UK transport as the cost of fuel. Reducing diesel duty to a level more in line with the rest of Europe would help to create a level playing field and a far fairer competitive environment.”
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