Rail tax decision right for environment and economy
Friday 05 April 2019
The government’s decision to keep red diesel taxation at its current levels is the right choice for the environment as well as the logistics industry, according to FTA. Following an almost year-long consultation, FTA, the business organisation representing logistics, is pleased the government has chosen to refrain from increasing tax on both rail and ancillary equipment.
Christopher Snelling, Head of UK Policy at FTA says, “FTA is delighted the government has listened to the advice of our members and has decided to not increase tax on red diesel. Rail freight brings many benefits and its use should be incentivised, not discouraged by punitive taxation. Every freight train takes about 60 HGVs off the country’s roads, which helps to reduce carbon emissions, air pollution and congestion while boosting road safety. Now the lingering threat of a tax increase has been quashed, businesses within the logistics industry have the certainty and reassurance they need to increase investment in this transport mode and consider long term switching across to rail. Rail freight helps the wider economy too: it provides a productive, cost effective, and high performing option for logistics operators needing to support key industries, including the construction, manufacturing and retail sectors.
“FTA also agrees with the government’s decision to not remove red diesel status for ancillary equipment. Many stakeholders held the mistaken belief that newer, cleaner equipment must use less fuel, so increasing taxation would encourage people to switch more quickly. But in fact, cleaner equipment is not more fuel efficient; often it can be less so. Increasing taxes would, therefore, only discourage businesses from switching to more environmentally-friendly equipment. FTA wants to see the government do more to encourage this uptake: we need improved standards for new equipment, so it can populate the market more quickly, and, as with HGVs, deliver massively reduced emissions over the next years.”
Efficient logistics is vital to keep Britain trading, directly having an impact on more than seven million people employed in the making, selling and moving of goods. With Brexit, new technology and other disruptive forces driving change in the way goods move across borders and through the supply chain, logistics has never been more important to UK PLC. A champion and challenger, FTA speaks to government with one voice on behalf of the whole sector, with members from the road, rail, sea and air industries, as well as the buyers of freight services such as retailers and manufacturers.