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Release Date:
Release ID: 4782

Fuel tax needs urgent reform, FTA tells Treasury

Fuel duty levels, road charging and the decoupling of duty paid on diesel for commercial vehicles were issues put squarely on top of the agenda by the Freight Transport Association (FTA) when it met today with Justine Greening MP, the Economic Secretary.

The leading trade body, which last year won the support of more than 120 MPs during its Every Penny Counts campaign to stop the logistics sector being hammered with successive above inflation fuel duty rises, was represented by CEO Theo de Pencier.

de Pencier said:

“FTA has enjoyed a strong relationship with Treasury ministers over the years and our meeting with the new Economic Secretary was very much in this spirit. To her credit, Justine Greening was keen to develop a good working relationship with FTA. She was receptive to our criticism of the fuel tax policy which has done such irreparable damage to the sector, and the economy at large, and responded well to our views on lorry road user charging, fuel tax and decoupling diesel duty for HGVs.”

With an enormous budget deficit to plug and tax revenues falling elsewhere as a result of the recession, there is a real risk that fuel duty will continue to be an easy target for policy makers. However, FTA has stated in no uncertain terms that, as long as a single level of diesel duty for all road users is applied, the Chancellor should resist the temptation to maintain a policy of above inflation increases in duty or risk putting the struggling sector under even greater strain.

de Pencier continued:

“Domestic vehicle operators have had to contend with by far the highest rates of duty in Europe during abysmal trading conditions, yet despite this UK fleets remain by far the safest and the greenest. Clearly, our logistics sector deserves some credit for its efforts – a fairer approach to fuel tax would be an ideal place to start.”

FTA is open minded on lorry road user charging, has welcomed the Government’s commitment to consider its introduction and estimates that the current ‘bring your own fuel policy’ represents a loss to the Treasury of over £200 million every year. A road user charge will ensure that all HGVs make a contribution, at least, to paying their way.

de Pencier concluded:

“A road charge could bring real benefits to the Treasury and the logistics sector, but industry needs to be involved heavily in its development from the outset. We are, of course, in favour of seeing foreign trucks pay their way, but we will be pressing the Department for Transport for more details on how this can be achieved equitably for UK hauliers.

“To get the most out of a potential lorry road user scheme, engagement with industry is not only recommended but essential to securing a solution that delivers the greatest benefits. We look forward to working toward such a solution with the Treasury and the transport ministers in due course.”

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