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Logistics UK urges government to maintain Fuel Duty cut and protect the economy

Logistics UK submitted its concerns and industry recommendations to the UK government earlier this week (1 February 2023), ahead of the 2023 Spring Budget.

The business group has highlighted the dangers of a disproportionate rise in Fuel Duty to inflation and the UK economy, and has called for a dynamic mechanism that retains the 5ppl Fuel Duty cut introduced in March 2022, while maintaining revenue levels through VAT and other sources.

Logistics UK has previously raised concerns regarding a reported potential 23% increase in Fuel Duty from spring 2023, following the publication of the Office of Budgetary Responsibility (OBR) Report on Fiscal Responsibility on the day of the Autumn Statement. Such an increase, according to Logistics UK boss David Wells, would equate to an additional £4,850 annual cost to run a 44t truck. The overwhelming majority (99%) of logistics businesses are SMEs and even a small haulage firm with seven HGVs could be facing an additional £34,000 to annual operating costs if the duty rise were to be introduced after March 2023.

Wells said: “Logistics businesses have seen total vehicle operating costs rise 12.6% (for the 12 months to 1 October 2022), with Logistics UK members also reporting rising costs of charging electric vehicles and using greener fuels, as well as costs of over £1 million to upgrade depot power supplies to enable electric vehicle charging. And as recently as January, government announced an 85% reduction in energy support for business, while average gas and electricity market prices were only 35% lower compared with when the energy support scheme was originally announced – driving up costs to our sector at a time of high inflation, and when our members should be focusing on the transition to net zero.

“The logistics industry is the backbone of the UK economy and is at the heart of every sector, delivering the goods needed by the nation. However, it operates on extremely narrow profit margins, in some cases of less than one per cent, and cannot continue to absorb these increased costs. Any measures that increase Fuel Duty will have a significant impact on consumer prices, which have increased 10.5% in the 12 months to December 2022. Not only would further inflation spikes be detrimental to the nation’s economy and potentially result in business closures, but it would also occupy funds that could have otherwise been directed at greener technology investments and therefore could result in failure to meet decarbonisation targets. Logistics UK is now urging government to use the upcoming Budget to ensure supply chains can keep moving.”


Published On: 02/02/2023 16:00:17


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In brief


Logistics UK will be running its Discover Logistics Careers weekend on 17-19 March and is encouraging members to get involved. As we know, there is a skills shortage across industry with research showing that 90% of the UK has never considered a career in the logistics sector.

Discover Logistics Careers is a dedicated weekend where members open their doors to the public and encourage them to look around and find out more about logistics. It is entirely up to members as to what they would like to do; previously, members have offered on-site tours, taster sessions and workshops as well as discussions and Q&As with a number of people from all levels throughout the business. To register your interest please visit the link below.


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