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Diesel duty deferral undermines stability

17th April 2003, Page 12
17th April 2003
Page 12
Page 12, 17th April 2003 — Diesel duty deferral undermines stability
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Which of the following most accurately describes the problem?

TA by Chris Tindall

Hauliers have offered a cautious welcome to Chancellor Gordon Brown's seventh Budget speech, but feel that his decision to defer an increase on fuel duty will create uncertainty over the future and undermine industry stability.

An Inflation-linked increase of almost 1.3p/Itt for diesel duty has been postponed until October, though this Increase will be reviewed if world oil price volatility persists. Duty on bio-diesel will rise from the same date.

Brown, in his written statement, announced that the government Is to publish a second progress report later this month for the 'lorry road user charging system, which it aims to have In place by 2006. The report is expected to set out how the charge will be administered and how it aims to be taxneutral.

The Treasury is also to look at reforming the tax treatment of employer provided vans, taking into account the environmental benefits and modern working conditions.

More good news for hauliers came in the shape of a freeze on truck Vehicle Excise Duty (NED).

Overall, the Road Haulage believes the Chancellor has been sympathetic towards the industry in the face of fluctuating fuel prices: "However, simply deferring an Increase in fuel tax for six months is not the answer," adds chief executive Roger King. "Fuel duty in the UK is still far higher than in the rest of the EU and this has a direct Impact on a UK haulier's ability to compete. This will be as true in six months' time as it is today." The Society of Motor Manufacturers and Traders (SHUNT) agrees and also urges the Chancellor to clarify his plans for VED in the long term.

Kevin Broder, from accountants MacIntyre Hudson, says *though no bombshells were dropped by the Treasury, the haulage industry will now be reeling from the recent National insurance rise announced in last year's Budget. He says: "It might also be that owner drivers' turnover is marginally affected by the registration limit for VAT rising from £55k to E56k." However, he admits the effect would be minimal.

On the whole, It was fairly unambitious," says Ray Dickson. managing director for Croydon haulier F Dickson Transport. "But I suppose that's good news! I was pleased that diesel was not increased, but I still think they take too much."

• christopher. tindall@rbl.co.uk