As part of its 2015 election manifesto, the RHA is calling for a 3ppl permanent cut in duty and notes that the UK diesel duty still remains by far the highest in the EU, impacting on haulier’s cash flow, profitability and UK competitiveness and growth.
RHA members have welcomed decisions made during the last parliament against driving up the rate of fuel duty. The strength the economy has regained is in no small measure due to these decisions. The RHA-funded report from the National Institute for Economic and Social Research in 2012 showed how a 3ppl permanent cut in duty would encourage fiscal growth and job creation – and that raising duty would have the opposite effect.
However, UK diesel duty remains a heavy tax burden on the road haulage component of 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. The next government should cut fuel duty by 3ppl to boost job creation and economic growth; and in any case, it must commit to making no increase to fuel duty in the next parliament.
Vehicle excise duty (VED)
The VED level for trucks has remained essentially unchanged for a decade, other than the adjustments made due to the introduction of the HGV road user levy – such that VED should be described as VED + levy. The new government must continue with this policy. Any increase would add to the burden on an essential industry that is already overly-taxed and would immediately damage the competitiveness of UK road haulage and its customers.