Budget 2020: Fuel duty rise bad for UK economy and no help for environment

Tuesday 25 February 2020

In its Budget 2020 submission, FTA, the only business organisation which speaks on behalf of all of the logistics sector, has raised concerns about the negative impacts the speculated rise in fuel duty would have. According to Christopher Snelling, Head of UK Policy at FTA, such a change would cause damage to the economy while not assisting government plans to transition the UK to a low-emission economy. Ahead of the Budget on 11 March 2020, the business group is urging the government to refrain from making the damaging decision to increase fuel duty.

“Ahead of the Budget, FTA is urging government to listen to the concerns of the industry which is the lifeblood of business and manufacturing; a rise in fuel duty would damage the UK economy and must be avoided. Rising fuel costs are already threatening the UK’s future business prospects, and as we enter into the post-Brexit period, and with many businesses already facing challenging economic conditions, any tax increase would stoke inflation, add to business costs and threaten the livelihoods of small businesses working with HGVs and vans.  

“This year, small businesses will be forced to upgrade their fleets early to meet the government’s Clean Air Zone requirements, at their own cost. To penalise them at the same time via a fuel duty increase would be deeply unfair, and unsustainable for many businesses.” 

Snelling added: “Such an increase will not help the environment as the alternatives to diesel that we need are not ready – the government has still not set the definition of an Ultra-Low Emission Truck – and the electricity supply needed for mass use of zero emission vans is not in place.  Making the operation of diesel trucks more expensive would not push people to change, as there is no direct substitute.” 

Other issues raised in FTA’s submission included the need to: reduce the cost of rail freight to maximise its role; continue investment in transport infrastructure for all modes; and to reform the Apprenticeship Levy into a Skills Levy to enable industry to train workers to fill all the types of roles that will be left vacant by the government’s new migration policy.   

Efficient logistics is vital to keep the UK 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.