The UK government needs to “learn the lessons of the 1990s” and refrain from increasing fuel duty disproportionately with Europe in its quest reduce the transport's impact on the environment, Freight Transport Association (FTA) has announced.

According to chief executive Richard Turner, sharply increasing fuel prices in comparison to competitor economies has left the UK transport industry with a cost disadvantage still being felt in 2006.

Addressing the FTA’s annual dinner at the Hilton Hotel, London, he said the Stern report on working to reverse the world’s dependence on carbon technologies included some good news for the industry as transport was one-seventh of the problem and the UK overall just a fiftieth.

Furthermore, in contrast to the rest of Europe, the UK industry is increasing its use of rail and being more efficient in moving goods by road whilst still supporting a growing economy, he said.

However, the industry needed to be prepared for change, he said:“Our response to global warming will not be a short-distance sprint, but a long-running marathon. Like all marathons, it is the preparation that is important. How do we prepare ourselves for this race? How do we build low carbon stamina into our operations that will maintain our efficiency and competitiveness during the race? There is an important distinction between preparation and the race itself. Success depends on global participation and all of us running together. There is no point, and positive dangers, in starting before the rest of the world is ready, and there is no merit in running away from the pack,” he said.

The “fuel duty escalator” introduced in 1993 was an attempt to reduce transport demand following the Kyoto agreement, he said, but the industry entered the race too soon and “with the rest of Europe still in the changing room”.

“Fortunately we got cramp and pulled out in 1999 but it left us with a damaging legacy. That legacy is high UK diesel duty, which to this day continues to suck in unfair competition from Europe and undermines the competitiveness and safety of our domestic hauliers. The learning point is that we must not repeat this error in response to the Stern Report. If taxation has a role to play it must be different taxation, and not more taxation. We must build low carbon stamina into our businesses and into our economy and we will need Government support and direction for this. This is one race where we never again penalise our domestic businesses by trying to win before our competitors have started.”