FTA and FFUK research highlights unseen impact of rising fuel costs
Friday 22 March 2019
Escalating fuel costs are forcing logistics businesses to freeze recruitment, lay-off staff and delay vehicle upgrades to stay afloat, according to a new study by FairFuelUK, supported by FTA. Speaking in reaction to the Shadow Chancellor’s support for an increase in fuel duty, the organisations are calling for the Labour Party to reconsider its approach on the issue; according to the research findings, rising fuel costs are already damaging Britain’s future business prospects and a rise in fuel duty would only exasperate this issue.
Christopher Snelling, Head of UK Policy at FTA, the organisation representing the interests of the logistics sector, commented: “FTA has campaigned relentlessly over the past few years to prevent an increase in fuel duty and so far, the government has listened: it has understood the impact a fuel duty rise would have not just on logistics businesses, but the wider UK economy. It is of vital importance that Andy McDonald, the Shadow Chancellor, understands how linked the rate of fuel duty is to the performance of the economy – increasing fuel duty directly adds to the cost of doing business in the UK. Escalating fuel costs are already forcing logistics businesses to freeze recruitment, lay-off staff and delay vehicle upgrades, as illustrated in FairFuel UK’s study; a rise in fuel duty would only exasperate this issue.
“Furthermore, a rise in fuel duty would provide little additional revenue to the government – each rise reduces receipts from VAT, income tax and many other sources because of its wider economic impact.”
FairFuelUK’s March 2019 study into fuel prices received 17,231 responses. 19 per cent of respondents said rising fuel prices had forced them to freeze staff recruitment, and a further nine per cent said it has forced them to lay-off staff. 80 per cent of respondents said they were planning to keep their commercial vehicle for the next 12 months – instead of upgrading it to more environmentally-friendly model, for example – and 52% said rising fuel prices influenced this decision.
Snelling added: “If any government wants businesses to switch to using more environmentally friendly vehicles, they should instead focus on how to make these options a viable solution to transporting the millions of tonnes of goods Britain needs delivered every day. Right now, more fuel tax on vans and HGVs would just reduce the size of the British economy and little else.”
Douglas Ross MP, Chair of the FairFuelUK All-Party Parliamentary Group (APPG) commented: “This announcement by the Labour Party shows a blatant disregard for road users, especially those in more remote and rural areas. For many people, driving is the only method of transport available to them. Increasing fuel duty would be narrow minded and would hit families and businesses right across the country. Yet again, it is clear that if the Labour party were in power, they would punish drivers and ignore the impact this would have for millions of people and businesses in the UK.”
Robert Halfon MP, Vice Chair of the FairFuelUK APPG, added: “It is hard to believe that the Labour Party – once the party of the workers – would launch an all-out assault on hard pressed motorists and crucify working people by putting up the cost of living for ordinary folk. A fuel duty rise would hit the NHS and food prices too because of the increasing costs of transportation, and small businesses would be crucified at a time when we need to keep costs low.’
Howard Cox, founder of the FairFuelUK campaign, commented: “The Treasury's own dynamic economic modelling, published in 2014, showed that lower fuel duty increases GDP, jobs and consumer spending whilst generating lower inflation. The Centre for Economics and Business Research (CEBR) has proven every year that the freeze in duty has generated £billions to the economy and the Treasury's revenue stream. So why would the Labour Party ever consider raising fuel duty?”
Efficient logistics is vital to keep Britain trading, directly having an impact on more than seven million people employed in the making, selling and moving of goods. With Brexit, new technology and other disruptive forces driving change in the way goods move across borders and through the supply chain, logistics has never been more important to UK plc. A champion and challenger, FTA speaks to Government with one voice on behalf of the whole sector, with members from the road, rail, sea and air industries, as well as the buyers of freight services such as retailers and manufacturers.