Thursday 27th Oct 2016 - Logistics Manager

Commons recognises unfair competition

The House of Commons Transport Committee has “hit the bullseye” in its Freight Transport report, says the FTA.

The publication acknowledges that the UK road transport industry is facing unfair competition from continental hauliers due to the higher levels of diesel duty it pays. It also highlighted the detrimental effect removing restrictions on foreign lorries working in the UK could have.

Geoff Dossetter, director of external affairs at the FTA, welcomed the report, saying it is unfair for UK hauliers to “subsidise their continental competitors through high levels of taxation, eight years after the government announced proposals to address the problem.

He added: “We can only agree with the committee when it says that it is ‘astonished’ that the government has abandoned plans to charge foreign lorries on UK roads without offering any alternative.”

Following the government’s decision to scrap the two pence per litre rise in fuel duty last week, the FTA said a review of commercial vehicle taxation could save the UK industry £280 million a year.

Dossetter said: “The government must now engage with the industry in order to find a practical means of bringing UK duty more in line with continental competitors.  Failure to do so will only result in higher costs for UK industry and higher prices for UK consumers.

“Given that almost everything we consume every day is the product of a lorry journey, then higher fuel prices contribute to price rises for everything else we buy.  The government cannot do much about the world price of oil, but it can reduce UK duty to bring it closer in line with the rest of Europe.

“With the price of oil having risen so sharply, the government needs to re-think its overall strategy on diesel tax.”