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RUNNING COSTS

18th November 1999
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Which of the following most accurately describes the problem?

DIESEL DUTY Ever-rising running costs are increasingly spelling the end of the road for many hauliers. And the main culprit in recent years has been the fuel duty escalator, now abandoned. But does this give free rein to increases? Adam Hill examines the problem.

Atruck with a Union jack livery is being hanged from a noose made out of a diesel pipe: it's an arresting image for the Freight Transport Association's poster and newspaper campaign. "I-ligh Fuel Duty is Strangling Our Industry", reads the legend. In similar vein, Road Haulage Association chairman John Bridge and his fuel nozzle have been a regular fixture at industry events for the past 18 months, making speeches about the iniquity of the government's fuel duty escalator, headlined by the catchphrase "Fair Play on Fuel".

Hauliers have been moved to protest in numbers which are unprecedented in recent times. London's Park Lane has been brought to a standstill; go-slows in other cities have disrupted traffic; petitions have been presented to Number TO. But did anyone really care?

The answer, against all the odds, seems to be "yes" because the apparently implaca ble Gordon Brown has abolished the fuel duty escalator. From now, he says, the Treasury will make set fuel duty on a "Budget by Budget" basis.

But rejoicing in the road haulage industry is not what you'd call universal. "We're not overly excited by this, there's still a lot of work needs doing," says the RHA. The FTA is more excited: "The abolition of the escalator is a bloody amazing achievement," it says. "But he's left us with a pocketful ofproblems with the legacy of the fuel duty escalator."

So have the fundamental problems really changed? "Joe Public isn't interested," Frank Stears of pressure group Trans-Action said last month. "Who's interested in what I pay for a litre of diesel? Big [transport] companies still won't do anything because they just want to see the little ones disappear because they think they'll get more work. They didn't come when they were needed. It is a very, very bleak picture, I'm afraid."

You might think that Stears would be happy with the pre-Budget statement, but you'd be wrong: "Gordon Brown hasn't said, 'we'll leave fuel alone'. Now is when the RHA, FTA and Trans-Action should get together and have another big demo. Keep the government on its toes—show it we are alive and kicking. There's a lot to do yet." And he is not only frustrated with his fellow

"1" I

hauliers. "The FTA says it has been lobbying for the past five years and it hasn't got anywhere. The RHA and FA say they're working behind the scenes—what does that mean?"

Stears is also annoyed that a meeting with shadow Transport Minister Bernard lenkin has not materialised.

"I can't put a date on it," lenkin insists," although he hopes it will be "this side of Christmas". But he is certain about one thing: "It is common sense to stop the fuel duty escalator." Isn't that a bit rich coming from a representative of the party that introduced it in the first place? "We think the government has overdone it," he says evenly.

Peter Little, managing director of Meeks of Luton, has done his sums, and calculates that over a three-year period the escalator cost him an extra £40,000 on his 14-vehicle fleet. "Quite frankly, they're castrating us," he says. "They don't give a hoot." Like Frank Stears, he is aware that the public protests have mainly been by the small guys. "We sent five trucks to the last one," he says. "If everyone had made that effort we'd have jammed it. Swift sent two! Every little helps. If we do nothing we get nothing." However, Little is mindful of the fact that his 0-licence is up , for renewal next year, and direct action, such as blockades, is

something to be approached with caution. "If everyone did it, they couldn't do anything," he says. But I don't want to lose my licence."

At least he has had a response from the government on the issue. In a letter to Peter Little's MP, Transport Minister Lord MacDonald wrote: "While I appreciate the difficulties many haulage companies.. .are experiencing in the face of increased competition, all of us need to understand the problems in depth before we can consider solutions. ..the only way forward is through discussion and that is why we established the road haulage forum."

At the road haulage forum on 6 September, trade bodies, industry representatives and unions met the DOT, Treasury, Department of Trade and Industry and Lord MacDonald to discuss the fuel duty escalator. David Green, directorgeneral of the FTA, emerged saying things were moving in the right direction; the RHA's John Bridge declared that things were "basically no further forward" and Lord MacDonald announced that it was "a very useful meeting".

At least the Chancellor's announcement indicates that the government was listening to some of the arguments.

To sum up: everyone in road transport agrees that the fuel duty escalator was crippling the industry. Now it has been abolished. But what do we have left?

We have two major trade associations which are failing to pool resources in a concerted effort towards a common goal; a government road haulage forum that is not even a regular fixture; an opposition that says it is sympathetic but will not set a date for a meeting with hauliers; and public protests at which the larger transport companies have generally been conspicuous by their absence.

Perhaps Frank Stears was right when he warned: "Whatever we get in the Budget, we deserve."

WHO'S TO BLAME?

Recently hauliers have directed their anger at Chancellor Gordon Brown, but let's not forget that it was the Conservatives who introduced the fuel duty escalator.

In 1993, the then Chancellor Kenneth Clarke announced an annual rise of inflation plus 3% per litre of diesel.

Earlier this year, shadow Chancellor Francis Maude admitted that perhaps the Conservatives "set the wrong example".

In February, opposition leader William Hague said: "We started it but it has been made worse in the past two years by this government."

The Tory line recently has been that they would not have upped duty to this year's levels, and that the government must abolish the escalator.

In 1978, duty on a litre of diesel was 7.7p, and duty plus VAT represented 53% of the total. In 1988, duty was 17.29p; added to VAT this made up 63% of the price. In 1998, duty was 40.28p per litre and VAT was 9.28p—making a grand total of 80% of the litre of fuel in your tank.

The next Budget is in March.

CONTACTS

A number of organisations, including Commercial Motor, have been instrumental in the campaign to abolish the fuel duty escalator. On 24 February CM presented a petition to Downing Street at

the mass lobby of Parliament. Trans Action organised the first high-profile protest against fuel duty when trucks disrupted traffic in London's Park Lane last year. The Kent hauliers were criticised by the Freight Transport Association and Road Haulage Association at the time, although the RHA added its support after the success of the rally

However, UK hauliers are still paying the highest diesel prices in the EU and only the most optimistic believe that the Chancellor will actually cut diesel duty in the next Budget.

III Freight Transport Association www.fuelduty.com Tel. 01892 552240

• Road Haulage Association www.rha,net Tel. 01932 841515

• Trans-Action 01233 641421 • Commercial Motor www.roadtransport.net


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