Fuel duty freeze is a missed opportunity, warns FTA

Wednesday 22 November 2017

The Chancellor’s decision to freeze the rate of duty on fuel is welcomed by the logistics sector, which is already battling inflation at a five year high, but a cut would have done far more to boost the economy, says the Freight Transport Association.

FTA, the UK’s largest membership association for the whole logistics sector, has been campaigning for a 3p cut in fuel duty to provide a significant and immediate positive impact on the nation’s economy.   Christopher Snelling, FTA's Head of National and Regional Policy, said the freight industry is disappointed by today’s Budget announcement: he believes the Chancellor could have gone far further to assist the sector which supports all other businesses across the UK:

“A freeze in fuel duty is a welcome decision, but it demonstrates a real lack of ambition by the Chancellor.  The cost of moving goods around the country and overseas determines the cost of doing business in Britain and the price of goods in our shops.  At a time when British business is under extreme pressure to prove its credentials and reinforce existing trading relationships, Mr Hammond has missed an opportunity to cut these costs, and make the UK a more competitive place to do business.

"Fuel duty increases would have been the wrong tool to use to address air quality.  As logistics operators currently have no practical alternative to diesel it would have produced no change in behaviour, just adding cost to those businesses who are facing the burden of the planned Clean Air Zones.”

FTA research shows the price of diesel accounts for nearly a third of the operating costs for an average 44 tonne truck.  Just one penny increase in the cost of a litre can add £470 a year to the cost of running one of vehicle.  Many FTA members run fleets of hundreds or even thousands of vehicles and the resultant cost of a duty rise can have a significant effect on operating margins and future solvency.

Recent data from the Insolvency Service shows the number of freight firms filing for insolvency between April and June was almost double the same period last year and has reached its highest level in five years.  In the three months up to 30 June 2016, 32 UK road freight companies declared insolvency.  A year later, the figure had reached 59.  

FTA, whose membership operates almost half the UK’s HGV fleet, says the sharp increase illustrates the impact of rising fuel prices and a weakening economic outlook on the logistics industry.  

 
FTA Press Office
01892 552255
press.office@fta.co.uk