Fuel
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it The 3p/lit increase on the cost of derv, representing a massive 12% hike, is only the beginning of a long, steep rise in hauliers' fuel bills.
The Chancellor promised further increases of at least 5% in real terms in future Budgets—almost doubling the commitment to rises of 3% promised by former chancellor Norman Lamont in his March Budget.
The justification for the rise, says the Government, is the need to meet 1992 Rio Climate Change Convention obligations to return CO2 emissions to 1990 levels by the year 2000.
"The transport sector must play its part in reducing CO2 emissions and the commitment to higher increases in road fuel duties should act as an additional incentive to road users to economise on fuel and to choose more efficient vehicles," says the Government.
The 5% increase in fuel tax is expected to reduce truck carbon (MtC) emissions by 2.5 million tonnes—transport accounts for 19% of the UK total, says the DOT. However, while reducing the threat of global warming is laudable, it should not be forgotten that of the 23.4 million vehicles on our roads, only 400,000 are LGVs.
Not surprisingly, the real reason for the 5% fuel duly rise that Clarke did not give is that it will force hauliers to throw an extra £300m a year into the bottomless PSBR pit. The rise, says the Freight Transport Association "puts us at the top of the European Union's fuel taxation league. For a company with ten 38-tonne vehicles, it will mean an extra £11,000 a year". TNT, whose fleet covers two million miles a week, will pay an extra £50,000 a week.
Operating costs will rise on average by 1.8% which is only sustainable if it is passed on, says Owner Operator UK's Rob McHugh.