Thursday 14th Dec 2017 - Logistics Manager

Fuel duty: no cut disappoints trade associations

Chancellor Phillip Hammond has frozen fuel duty rates in the budget – disappointing both the Freight Transport Association and the Road Haulage Association which wanted a cut.

And RHA chief executive Richard Burnett called on the chancellor to amend the budget to introduce a fuel duty rebate scheme for essential users of fuel.

The chancellor froze Vehicle Excise Duty and Road User Levy rates for heavy goods vehicles from 1st April 2018, although the VED rates for vans will rise in line with the Retail Price Index.

The government is planning to call for evidence on updating the existing HGV Road User Levy this autumn. “The government will work with industry to update the Levy so that it rewards hauliers that plan their routes efficiently, to encourage the efficient use of roads and improve air quality.”

However, VED for diesel cars that do not meet the latest standards will rise by one band. The proceeds will go towards a £220m Clean Air Fund for local areas with the highest air pollution.

On alternative fuels, the government is to review whether the existing fuel duty rates for alternatives to petrol and diesel are appropriate, ahead of decisions at Budget 2018. In the meantime, the government will end the fuel duty escalator for Liquefied Petroleum Gas (LPG). The LPG rate will be frozen in 2018-19, alongside the main rate of fuel duty.

Christopher Snelling, the FTA’s head of national policy, said “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.”

Burnett said: “At a time of Brexit uncertainty, the Chancellor had the golden opportunity to make the production and distribution of UK goods more competitive.

“We implore the Chancellor to amend his budget and introduce a fuel duty rebate scheme for essential users of fuel – a system already adopted by 8 EU member states, including our nearest neighbours – The Republic of Ireland, Belgium and France.

“An Essential User Rebate of 10 pence per litre would enable our hauliers to gain advantage over their European counterparts and would considerably lessen the fiscal drain on our emergency services which are also in a financial stranglehold as a result of the high price of diesel.”

FairFuelUK was happier. In a statement, Quentin Willson and Howard Cox of FairFuelUK said: “Pleased that the chancellor has understood the debilitating effect of raising fuel duty on consumers, households, businesses and the broad economy. He knows that now is not the time for gesture politics and that’s why he’s listened to the everyday anxieties of FairFuelUK’s 1.5 million supporters and continued the duty freeze.”