News

The Road Haulage Association (RHA) is urging the government to set aside "partisan politics" and consider a proposal tabled by the Scottish National Party (SNP) to establish a benchmark price for oil with increases above this level offset by reductions in fuel duty. The amendment to the Finance Bill, which is currently before the government, would effectively determine a fixed price for a barrel of oil - any increases in its cost would be compensated  for by reduced fuel duty.

The RHA, which says it proposed the idea, says the Chancellor would not lose revenue because the extra VAT he would recover would more than cover any reductions targeted at the haulage industry. RHA chief executive Roger King says: "We know partisan politics might influence a Labour government in its view of an SNP proposal but we urge that these be put aside in the interests of the UK economy."

The RHA is also calling for the government to abandon its plan to increase tax in October and to reduce the VAT repayment period for fuel from four months to two. King adds: "The Prime Minister has urged stability within the economy but we haven't got that with fuel prices. Haulage rates cannot keep up with costs and operators are gradually falling into a financial trap even if they have a fuel escalator in their contract, this does not make up for the even faster increase in prices."

Operators, however, have given a mixed response to the RHA's  proposals. Paul Denyer, director at Alan Firmin, says the call for the government to abandon the fuel duty rise in October is a "no-brainer" for the industry. "It's starting to become a massive problem because we're struggling to pass on the fuel surcharge to the customers. It's between 7% and 10% and they are saying enough is enough." When it comes to fixing a price for a barrel of oil and adjusting fuel duty accordingly, Denyer says its a clever way of looking at the problem.

"There's no way the government will rebate fuel duty for hauliers. But at the moment every time fuel prices go up the government profits more and more. If they set a price and then cut fuel duty when the price per barrel goes above it, the government would not really be losing anything." But Derek Linch, director of Derek Linch Transport, is less convinced by the RHA's proposals. While admitting that the 2p/lit fuel duty increase would be hard to take, he says it's a drop in the ocean compared to the price rises in the last 12 months.

He suggests the RHA should be pushing for an essential user rebate, similar to the one coach operators receive. "Coach operators get a 41p/lit rebate because they are essential users. But [hauliers] are essential users. I think the RHA's proposals are a funny way of trying to do things, when a far simpler answer would be a vignette to charge the foreign trucks using the UK's roads."