FTA reacts to Spring Statement

Wednesday 13 March 2019

Reacting to the government’s Spring Statement, Christopher Snelling, Head of UK Policy at FTA (Freight Transport Association), the business group representing the interests of the logistics sector, commented:

“FTA is pleased the Chancellor of the Exchequer has recognised the importance of infrastructure investment and skills development in the Spring Statement. We want to see the UK given the long-term investment in transport infrastructure that it needs to meet the challenges of the future.  We also want to see the government adopt a more flexible approach to skills training by transforming the Apprenticeship Levy into a Skills Levy, to fully cater to the range of training that industries, including the logistics sector, need to populate its workforce with the right candidates.”

To coincide with the launch of the Spring Statement, FTA will send all Members of Parliament a Briefing Paper on logistics and taxation today. The aim of the paper is to increase the awareness of MPs on the realities of the tax regime and charges faced by logistics in the UK and how they interact with industry behaviour.

Snelling continued: “The UK’s logistics sector is the most highly taxed in Europe, yet legislators do not appear to understand the implications this has on industry; MPs simply do not understand the realities of logistics and taxation, nor how industry reacts to tax adjustments. This ignorance leads to mistaken beliefs, including the view that the industry is under-taxed, which in turn leads to misinformed proposals. For example, believing that increasing one tax or another could solve the social impacts of freight movements. Life is more complicated than that, as we hope to show in this Briefing Paper.”

The briefing paper sets out that:

• Rail freight pays over £100m each year in taxes and charges to the government and Network Rail, reducing its ability to play as large a role as it could in the UK supply chain; this figure is expected to increase in the next few years.
• Road fuel duty is the highest in Europe; 50% higher than the EU average.  The tax could be reduced without cost to the UK Exchequer due to the other tax revenue that resulting economic activity would generate.
• Most tax changes do not affect environmental performance, as this is already highly incentivised.  Service is king and determines what operators do. Mostly taxes are simply revenue raising exercises, at a direct cost to the UK economy and UK consumers.

The Briefing Paper can be read at www.fta.co.uk/taxationbriefing

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.