The Freight Transport Association (FTA) has revealed what was in its Budget submission to the Chancellor, and there is little surprise that the scrapping of the fuel duty increase was top of the list.

FTA’s members operate over 220,000 goods vehicles, consign over 90 per cent of the freight moved by rail and over 70 per cent of sea and air freight. The association is arguing that the planned increase could cost the industry an additional £450 million per year, on top of the £7.22 billion per annum tax take from fuel duty.

The association’s Budget submission called on the Chancellor to:

• Abandon plans for an above-inflation fuel tax increase on 1 April and freeze duty at current levels in 2010/11;
• Introduce a fuel price stabiliser, provided it can be made to work for the industry;
• Leave lorry Vehicle Excise Duty unchanged;
• Make early progress in introducing a time-based lorry road user charge to ensure that foreign lorries pay their way on our roads, together with a parallel compensation mechanism to offset the charge for UK-based carriers;
• Support businesses involved in international trade by resisting pressure to add to the cost of international freight movements through a ‘per-plane’ tax to replace the current regime of Air Passenger Duty;

• Help the freight industry’s actions to reduce carbon dioxide emissions by widening the scope of low-carbon HGV investment grants and providing the right investment environment for the development of low-carbon refuelling infrastructure. 

Last month, Simon Chapman, FTA’s chief economist, said that although the price of a barrel of oil was beyond the Chancellor’s control, the level of tax he “heaps on top of it” is certainly not. He also described the planned fuel duty hike as simply a “revenue raising ruse”.

“It offers no benefit to the economy, serving only to push up costs and inflation and erode competitiveness. The freeze in fuel duty in April, which FTA has asked for, will help check rising prices and improve cash flow for businesses in the UK,” the economist added.