The RHA was pleased that the Chancellor maintained the freeze in the fuel duty rate for diesel in the Autumn statement in November. However, even with the freeze, UK diesel fuel duty still remains by far the highest in the EU. This impacts on haulier’s cash flow, profitability and, more widely, UK competitiveness and economic growth. The RHA will continue to support a future reduction in the fuel duty rate.
RHA members have welcomed the decisions made in recent years against driving up the rate of fuel duty. These decisions have helped the economy gain strength.
However, UK diesel duty remains a heavy tax burden on the UK supply chain, driving up costs for companies and consumers, undermining competitiveness and soaking up the working capital of haulage businesses. The impact in the more remote areas of the UK, which are further from suppliers and major markets, is especially damaging.
Our fuel duty level is the highest in the EU by far – the difference between what we pay and what our competitors pay is not marginal, it’s substantial. One articulated truck with a single driver pays up to £14,000 more in fuel duty per year than all of our EU neighbours. To support UK competitiveness the RHA believes that the government should cut fuel duty by between 3ppl and 5ppl – this will boost job creation and economic growth.
We recognise that some are calling for action on the use of diesel as a fuel in an effort to tackle local air quality issues. The RHA agrees that some action should be taken to discourage inappropriate use of diesel as a fuel, in particular in urban areas. However, fuel duty is not the appropriate tool to drive long-term change.
The RHA supports measures that systematically tackle this issue over the long term. Tackling congestion and improving traffic flow, re-examining some traffic control measures and encouraging the use of non-diesel vehicles are all viable and effective approaches. For new private vehicles it would make sense to re-consider some of the incentives in place that encourage the purchase of diesel vehicles. Encouraging petrol hybrid cars, electric cars and the use of these technologies in taxi and bus fleets will also have a long term impact - all are viable approaches that can be taken now.
28 November 2016