The Freight Transport Association has welcomed the Budget statement from the Chancellor today and his pledge to 'support the transport links we need to trade our goods.' However, FTA still wants further action to support the sector that is the lifeblood of the whole economy.
Fuel Duty
The Government's decision not to increase fuel duty in the Budget is a positive move but FTA will continue to defend road transport operators against the threat of the above inflation increases set to come into force later this year. For example the proposed rise of 1p per litre on 1 October 2010 would cost commercial vehicle operators an additional £125m a year - a rise just not sustainable for businesses already on tight margins and hit badly by the recession.
James Hookham, FTA's Policy Director, said:
'FTA is pleased to see the concerns of the logistics sector taken seriously at the heart of the Budget. We welcome the Chancellor's recognition of the sensitivity of transport costs to changing fuel prices at a time when the recovery is still fragile and world oil prices volatile. We need to use this time to commence serious assessment of ways in which taxation of commercial vehicles can be decoupled from private motor cars, possibly through a lorry road user charge for a fuel duty stabiliser.'
Simon Chapman, FTA's Chief Economist said,
'FTA is open-minded to the idea of a fuel duty stabiliser. Diesel costs represents a third of the total costs of running a truck and in principle, a measure which tempers the price volatility that we have seen since the beginning of 2008 is welcome. However, fundamental questions remain such as the level of the fuel price ceiling at which the stabiliser is activated and the frequency of fuel changes necessary to achieve price stabilisation. As a traded commodity world oil prices regularly move by 10 per cent in a week.
'The Office for Budget Responsibility needs to concentrate on both fluctuations in the US dollar oil price and the Sterling Dollar exchange rate. Any scheme must not impose a new level of bureaucracy on industry.'
Aviation Tax
FTA welcomes the proposed consultation on the change to aviation tax, however FTA will defend UK competitiveness against any measure that undermines air freight services. Air freight carries 40 per cent by value of UK trade outside of the EU.
Christopher Snelling, FTA's Head of Global Supply Chain Policy said:
'FTA welcomes the Government's commitment to consult on possible changes to aviation taxation and we will participate fully in this process. Any measure which penalises air freight in the UK would run the risk of hurting UK competitiveness in international markets and will be robustly challenged.'
In summary, FTA is pleased that the new coalition government has listened to the messages of the logistics industry as conveyed by FTA on behalf of its members.