Influence
Policy Summary May 2008
Fuel duty
The issue of fuel prices and fuel duty remained at the top of the agenda throughout April as the price of oil on the world’s market continued to increase, reaching $120 a barrel by the end of the month with bulk diesel prices topping the £1 per litre barrier and pump prices climbing close to £1.30 per litre. The situation was further complicated by the strike of workers at the Grangemouth oil refinery, an action which threatened supplies and, prospectively, prices.
FTA continued its campaign targeted at two key areas. The proposed 2p per litre increase in fuel duty planned for 1 October needs to be scrapped, and duty charged on commercial vehicles should be decoupled from the way it is charged on private cars. During April, FTA personnel met with officials at both the Treasury and Department for Transport (DfT) regarding these matters. FTA’s research report from NERA (National Economic Research Associates) comparing operational costs for foreign vehicles working in the UK with the domestic fleet, was presented. The research shows that foreign vehicles’ costs are between 10 and 15 per cent lower than those of UK operators, primarily due to cheaper fuel. FTA continues to await a report commissioned with PricewaterhouseCoopers which will contain proposals as to how a decoupling could be achieved.
At the end of April a number of road hauliers conducted a demonstration in central London, complaining about high diesel costs and taxation. The event coincided with publication of oil company results showing massive profits for the first quarter of 2008 resulting from the increased price of oil. FTA does not support such action but expressed concern regarding the issues complained of.
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Foreign Lorries
During April, DfT announced new investment for the Vehicle and Operator Services Agency (VOSA) of £24 million over three years, targeted at stronger enforcement on foreign lorries. The new funds will result in an additional 97 members of staff and will enable VOSA to conduct 24/7 operations at key locations. In this context FTA has called for VOSA to publish the names of the foreign lorry operators most frequently found to be operating unroadworthy vehicles, breaking drivers’ hours rules and being overloaded. FTA says that such an arrangement would provide an incentive for improved maintenance. DfT’s announcement was also accompanied by a report which rejected the proposal to introduce a vignette, a charge for foreign lorries working on UK roads. The report claimed that the introduction of such a charge could not be justified on a cost benefit analysis. FTA has totally rejected the conclusions of the report, finding the results incorrect ‘by several orders of magnitude.’ FTA has called for the research work and the report to be independently reviewed and has raised the issue with the DfT. FTA continues to call for foreign vehicles to provide appropriate details of their operation when they enter the UK and for them to pay a charge to use UK roads.
Longer heavier vehicles
The research report on longer, heavier lorries, originally scheduled for publication last October, has still not appeared. In a Parliamentary answer on 22 April the Secretary of State for Transport, Ruth Kelly, said that the report would be issued ‘before the summer recess’ (mid-July). However, she also said that, despite not having seen the report, she was ’not persuaded’ that there was a case for such vehicles. FTA continues to call for trials of such vehicles on the grounds that they would move more goods on fewer vehicles and, as a consequence, result in reductions in fuel, emissions, accidents and general costs. Two vehicles could replace three of the present maximum weight. FTA has written to the Secretary of State suggesting that she must consider the key economic benefits with which the vehicles would provide the industry at a time of enormous pressure to reduce fuel consumption and emissions.
Aviation Duty
FTA has submitted evidence to the Government consultation on proposals to introduce a duty charge on air cargo. FTA says that such a new tax would disadvantage the UK and affect the competitiveness of the UK aviation sector. In the past, air freight has not been the subject of aircraft duty – such duty has only been paid on passenger aircraft which, of course, carry freight. The new proposals would make a charge on the aircraft itself, thus drawing air freighters into scope. FTA says that by becoming the only country to introduce such a duty, the UK will not change macro industry patterns regarding which planes will be used, but will risk increasing the balance against the UK in respect of major industry decisions regarding locations and where to operate services from. This could cause long-term economic harm to the UK.
London PCNs
FTA’s campaign regarding the extortionate number and cost of penalty charge notices issued against delivery vehicles in London continues. There are believed to be eleven companies now paying over £1 million per year in fines. Lawyers have been consulted on the prospects of challenging the London boroughs in the way that they are operating their parking and delivery regimes. In addition, FTA has now assembled a group of like-minded organisations to join us in this campaign. These groups include London First, the Federation of Small Businesses, London Chamber of Commerce and Industry, the Brewery Logistics Group, the British Frozen Food Federation and others.
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