Costs & Regulation

Costs & Regulation

Making it easier for businesses to do business through lower costs and simpler regulation.

Rising costs have placed thousands of small hauliers under huge financial constraints with rising fuel, wage, and energy costs. This has been exacerbated by an acute shortage of drivers, vehicles, and parts. 

Around one third of the running cost of a HGV is fuel, with almost half (47%) of the cost of a litre of diesel consisting of fuel duty. 

The continued freeze and 5p cut for fuel duty within the Chancellor’s Spring Budget was an important step to support Britain’s drivers.

The RHA proposes an Essential User Rebate on fuel duty of 15 pence-per-litre to support hauliers and coach operators and in turn limit the inflationary impact on consumers. An Essential User Rebate would be a simple, targeted mechanism to support the operators keeping Britain’s supply chains moving. It would also be significantly more manageable for the public purse than further fuel duty reductions and help to limit the cost of living crisis currently felt by UK consumers in shops and supermarkets.

Unified Speed Limits for HGVs

We believe that the speed limits for HGVs should be the same across the UK. There are clear economic benefits for logistics companies who move freight by road in England and Wales where the speed limit on trunk roads is set at 50mph for HGVs. Scottish companies are being denied these efficiencies and benefits of their competitors in the south by being restricted to a maximum speed of 40mph on the same standard of road. This constraint puts Scottish hauliers at a competitive disadvantage and later this year we will be carrying out a trial on the A75 with a view to sharing the findings with the Scottish Government and a full report advocating for unification of speed limits throughout the UK.  

Road user charging 

With the increased take up of electric vehicles, there will be a looming tax “black hole” from the falling tax take. Road transport tax raises around £35 billion per year from VED and Fuel Duty.  This will be lost without a new system. 

To deal with the falling tax from motoring, some have proposed the introduction of Road User Charging (also known as “Road Pricing”). The RHA does not believe that Road User Charging is a viable option to replace lost tax as we switch to electric vehicles.  

We believe that a simple single national system of road taxation must be maintained, and that system should be based on the two current proven road transport taxes.  

We are proposing that; -

  • Vehicle Excise Duty (VED or “road tax”) is retained for all road vehicles – but extended in 2023 to include all new electric vehicles,
  • Fuel Duty for petrol/diesel/gas fuelled vehicles is retained and continues to be based on pence per litre
  • A Fuel Duty is applied to the electricity used to externally charge electric vehicles based on pence per kw/h charged.

This proposal simply extends the current VED / Fuel Duty system into the world of Electric Vehicles (and Hydrogen if needed too).  

This modified tax system for vehicles will be quicker, cheaper and simpler to introduce than any road user charging scheme.

Our key asks on costs and regulation are: 

  • Maintain the fuel duty cut and freeze
  • An Essential User Rebate on fuel duty
  • Continued freeze of Vehicle Excise Duty for HGVs
  • Increased Sleeper Cab Allowance
  • A unified speed limit across the UK for HGVs
  • Review of road freight regulations which can be simplified and reduced