The tax rises on fuel duty implemented today could result in a bill of more than £500 million for the freight industry.

According to a report from the Freight Transport Association (FTA), consecutive rises in fuel duty, the first taking place today and the second in just four months’ time, will hit commercial vehicle operators hard.

Moreover, the VAT reduction designed by Alistair Darling as a way of kick-starting the economy is of little use to the transport sector because businesses can already claim back VAT on fuel purchases.

The FTA has written to the prime minister demanding a meeting to discuss the potential crisis within the logistics sector. It will call for immediate action from the Treasury either to reverse the decision or to look at more options for commercial vehicles.

James Hookham, FTA’s director of policy, said: “This is an absolute betrayal of the logistics industry. The Chancellor said he wanted to give the economy a shot in the arm, what we’ve got is a kick in the teeth.

“For many firms, the extra tax bill is equivalent to several drivers’ wages. This could mean significant redundancies across the logistics industry. The Chancellor will have those job losses on his conscience unless he acts to reverse this disastrous decision,” he said.

The association has long been calling on the government to introduce a lower level of fuel duty on diesel for commercial vehicles.

“The UK relies on the logistics industry to keep the economy moving and we already more than pay our way, putting £7.8 billion into the Treasury coffers each year. We are not asking for a handout from the government: we are simply asking them to aid the survival of the industry,” said Hookham.

Topics