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THEY KNOW NOT WHAT THEY DO
Page 10
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Road transport is of critical importance to the UK economy, so the latest fuel duty increase could have dire consequences for the whole country. Do we feel pessimistic? Of course we do. It's hard to find cheer in the government's intransigent position over the fuel rise. In fact we don't believe its implications have been fully appreciated, despite the freeze on vehicle excise duty for LGVs promised for 2008/9. As the FTA says, the Chancellor is grabbing £130m a year from road haulage and doling out a few coppers in return.
!Meth,.
We fear for the future. Not because the industry will be left at an even bigger disadvantage against foreign competitors (though it certainly will). Nor because this tax is being dressed up as a green measure to get vehicles off the road (when applying this argument to essential users is farcical). We're worried because this 2p/lit increase is going to create an excessive demand for credit in an industry already up to its armpits in hock, t_ist as the global credit squeeze begins to bite.
Some will argue that rising fuel costs are simply a transport management issue; they should be passed directly onto the customers. But many operators have 40% of their operating costs (ie fuel) on credit, so increased fuel costs translate directly into an increased credit requirement. If you can't get enough credit to fuel your trucks, it really doesn't matter whether you can pass the rise onto your customers — you won't be around long enough to find out.
We urge the government to rethink this fuel duty rise, and to abandon the further increase it plans for April. Increased fuel duty is unlikely to persuade Mrs Idle-Rich to forsake her Chelsea tractor and take Tarquin and Petunia to school by bus — it never has thus far. But it could plunge a £60bn UK industry into crisis.
If a truck driver takes a wrong turn he looks for the first opportunity to make U-turn and get back on course. The government has clearly made a wrong turn; we strongly suggest it does likewise.