Comment
Theo de Pencier, Chief Executive, FTA
Budget may prove the critical tipping point
Talk of a double-dip recession has increased noticeably of late. While the UK did officially emerge from recession in January, it was only by the skin on its teeth – and even this is not really certain as the official figures remain subject to revision. Clearly, any downward revision of the 0.1% growth recorded in the fourth quarter of 2009 would be very bad news indeed.
Even if the recession is over, it looks increasingly likely that the recovery will be painfully slow. As FTA’s chief economist points out this month (see page 6), the UK has been storing up a lot of inflation in the economy lately and banks remain reluctant to loan money to businesses, leaving the nation’s recovery in a fragile state. All of which makes the forthcoming Budget among the most critical Labour has delivered in its 13 years in power.
Taxation and spending will be in the spotlight like never before this time around, of course, with the Chancellor doubtless eager to maximise the former and minimise the latter. But each could, if overdone, lead to social and economic disaster.
In FTA’s Budget submission, we have called for Alistair Darling to abandon planned aboveinflation increases in levels of duty on diesel and gas oil (see page 5). This will, undoubtedly, feel counter-intuitive to many at the Treasury at a time when the Government has to raise its income and slash its outgoings. But giving both consumers and industry a little bit back in the short term will pay handsome dividends in the medium to long term in encouraging growth – growth this country desperately needs and growth that would ultimately lead to more tax revenues one way and another for the Treasury.
Looking more directly at logistics, meanwhile, we’d like the Government to put its money where its mouth is on the environment with some clear financial incentives for operators to run the cleanest possible trucks, from higher VED rates for those who don’t to a vehicle scrappage scheme to take older, more polluting vehicles off the road.
We have also recommended that the Government finally takes a proper look at fuel duty decoupling for commercial vehicles and that it should re-evaluate the case for a vignette for foreign vehicles operating in the UK. And last, but by no means least, we’d like this Government to confirm its current investment plans for our transport infrastructure.
Taken together, these various measures would help boost the competitiveness, efficiency and cleanliness of the UK’s logistics sector, encouraging its return to growth, safeguarding the millions of jobs it accounts for and ensuring it continues to generate very substantial tax revenues for the Treasury in years to come.
We might not get everything we have asked for, of course. But those that don’t ask don’t want, as the old saying goes. And frankly, in the current climate, the logistics sector wants – and needs – all the help it can get.
Robin Meczes, Freight Editor
When saying nothing really speaks volumes
By the time this issue of Freight is out, a general election can be only a matter of weeks away. By 4 June, at the latest, it will all be over. So what might the implications of the various outcomes be for the world of transport and logistics?
Frankly, your guess is as good as ours, judging by the responses we got from the three main political parties this month when we approached them to find out more about their transport policies.
From Labour, we got a lot of hot air about its achievements in the last 13 years and very little about what fresh steps it would take if it got back into power. From the Conservatives, a vague promise to tackle the issue of foreign companies filling up with cheap fuel abroad before coming to work in the UK – though no indication of just how they might do it. And from the Liberal Democrats, a statement that they support the moving of freight (hallelujah!) but oppose the emitting of carbon. Hardly inspiring stuff, is it?
The subject of rail freight, at least, did encourage all three a bit further out of their shells but beyond this, many of the hard questions continue to go unanswered.
Most shocking, perhaps, is the lack of clarity on what the various parties will do about fuel duty. The Conservatives simply failed to respond on this; the Lib Dems promised to reduce the cost of fuel but gave no clue as to how; and Labour only felt it appropriate to remind us that fuel duty has fallen in real terms over the past decade and will be lower in real terms in 2013-14 than it was in 1999. The terms ‘red rag’ and ‘bull’ spring immediately to mind.
Overall, we were highly disappointed with the level of detail provided by all three parties. Is it really too much to expect those who would lead to be able to communicate what direction they are taking us in, just three months before we all have to make our minds up?
