UK Shippers Angered Over Fuel Duties

Calling the UK's Chacellor of the Exchequer “Dracula” for drawing financial blood out of the industry when it should be receiving a transfusion, the Freight Transport Association (FTA) warned of job losses and business closures resulting from increased fuel duties.

"The logistics sector is the lifeblood of the UK economy, and rather than the transfusion we need, [Chancellor of the Exchequer] Alistair Darling has turned Dracula. Insolvency in the logistics sector has doubled in the last year and the number of heavy goods vehicle (HGV) drivers looking for work has almost quadrupled. What more evidence does the Government need that parts of the sector are on their knees?" asked James Hookham, policy director for FTA.

Figures released earlier by FTA showed that nearly half of its members have already laid off staff in 2009, with a further 40% considering redundancies in the second quarter. Two fuel duty hikes in just five months have landed businesses with an additional £533 million ($807 million) bill, and the concern is that the increases announced in April will make that burden too much for some businesses-in particular, those smaller, family-run operations-to bear, said the FTA.

FTA's Hookham warned that hiding behind environmental ‘greenwash' was fooling no-one: "The logistics sector has a strong track record of reducing emissions and investing in greener vehicles. Ironically, the Chancellor's announcement has put the kibosh on many businesses being able to make that investment. It may be unpopular to tax motorists, but the fact is that private cars add far more to the UK's CO2 emissions than commercial vehicles. That's why the time has come for the government to give serous consideration to different rates of duty for business users and private motorists."

According to the FTA, the Chancellor announced on April 22nd that fuel duty will rise by two pence per litre from September 2009. It points out fuel duty increased on December 1, 2008 by two pence per litre (ppl) and by a further 1.84ppl on April 1, 2009. Cumulatively, these increases have placed an additional £533 million burden on logistics businesses.

According to Office of National Statistics figures, continues FTA, claims for Jobseekers' Allowance have risen markedly within the logistics sector from March 2008 to March 2009. Specifically, HGV drivers' claims rose 365%. Transport managers' claims rose 190%. And, van drivers' claims were up 89%.

FTA carried out its Quarterly Transport Activity Survey earlier in April. Of those members who responded, 48% said that they had made redundancies in the last quarter, while a further 30% said they are considering redundancies in the second quarter of 2009. Nearly 40% have cut back on using agency drivers.

In March, FTA launched the Every Penny Counts campaign, urging the Government to rethink its plans to increase both fuel duty and the fees levied by the Department for Transport's executive agencies. Despite widespread support from within Parliament, including the Government's own backbenches, these calls were ignored, said FTA. The Freight Transport Association represents the transport interests of companies moving goods by road, rail, sea and air. FTA members operate over 220,000 goods vehicles-almost half the UK fleet. In addition they consign over 90% of the freight moved by rail and over 70% of sea and air freight.

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