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Home > No increase on fuel duty, says FPB
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30 January 2008  
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The FPB is backing a campaign to reduce fuel costs, and is urging the Government not to raise diesel duty for the second time in six months. VAT on fuel went up by 2p per litre in October 2007. The FPB believes that a similar rise in April will further harm many small hauliers and businesses that rely on freight transport for deliveries and supplies.

The FPB is joining the Freight Transport Association (FTA) in calling on the Government not to raise firms' fuel bills, and reverse the previous increase. Both are also seeking longer-term solutions to problems caused by the volatility of the oil market and the lower rate of VAT on fuel enjoyed by UK firms' competitors elsewhere in Europe.

"The Government should learn from its previous experience of fuel protests and blockades, when petrol stations were forced to close because there was no fuel," said the FPB's Phil McCabe. "Many smaller firms were hit hard and it is not a situation we would like to see happen again. We are wholeheartedly behind this campaign and encourage alternative proposals to be discussed as a matter of urgency."

He added: "Two years ago, for example, a survey of the FPB's members, in which 67% of respondents warned that rising fuel duty would have severe consequences for businesses, prompted the FPB to write to Gordon Brown calling for variable fuel duty to be introduced in order to help stabilise pump prices."

In the past, the FPB has campaigned for fuel duty to be linked to fluctuating oil commodity prices, creating a situation where the Treasury could lower VAT on fuel by an equivalent amount, and keep prices at an acceptable level.

The FTA has called for a system of taxation, which separates the way in which diesel VAT is levied on commercial vehicles from fuel duty charged on private cars. This could include rebates for commercial vehicles.

"It is crazy that, after so many years, we still operate the same tax scheme for charging duty on fuel for all road vehicles. In 2008 the fuel bill for a single 40 tonne articulated lorry is over £37,000," said the FTA's Director of External Affairs, Geoff Dossetter. "Commercial vehicles should certainly pay their cost to the roads system but taxation to this extent amounts to a bill for operation and it is not acceptable."

"The Chancellor should scrap his plan for a 2p per litre duty increase and revise the tax system decoupling the way duty is charged for private cars and commercial vehicles."

David Humphry, of RA Haulage Co, London, said that the rising cost of fuel was adversely affecting his business.

"Fuel counts for about 30% of our costs, and that's probably a fairly stable figure throughout the industry," he said. "It's a big cost to pass on – and if you can't control your costs you will be in trouble. Certainly, it's affecting our profitability."

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