The Road Haulage Association is pressing the Chancellor to make an announcement in his Autumn Statement that he will continue to freeze fuel duty. Figures produced this week by the RHA clearly demonstrate that the £150 million funding needed to effectively tackle the crippling driver shortage would actually make money for the government.
The RHA is calling for funding to be paid direct to haulage operators to enable them to train the 50,000 new drivers that the industry, and the economy, so desperately need. RHA analysis clearly shows that this investment would be recouped in terms of income tax and national insurance from the new UK driving jobs.
In addition, the requirement for the extra vehicles needed could generate up to £275 million in fuel duty revenue.
“This funding would be self-financing for HM Treasury”, said RHA chief executive Richard Burnett. “The extra investment in UK skills would reduce the industry’s reliance on drivers from abroad, which the RHA estimates leads to approximately £180 million in remittances sent back to those countries that would otherwise be spent in the UK, supporting employment and generating VAT.
“Immigration minister James Brokenshire has criticised UK firms for becoming too reliant on foreign workers – and we agree that is a big industry issue. But the government is doing nothing whatsoever to encourage firms to invest in UK skills.
“We currently have no alternative but to limit our aspirations for growth because of the cost of driver training – the HGV training sector is far smaller and weaker than it should be. We have now reached the point where haulage customers are becoming more and more concerned about how they are going to get their food, materials and products delivered to consumers.”
Where will the money come from?
One option put forward by the Association is that government takes a small proportion of UK duty in a time-limited response to the driver crisis. “We are asking the government to invest £150 million, equal to 2.6% of the total of fuel duty paid by HGV in a single year (equal to 1.52 pence/litre), into getting UK residents licenced and qualified to drive in the industry”, Richard Burnett continued. “This investment is vital to secure the future of the haulage industry and maintain and enable economic growth”.
At 57.95 pence per litre, UK-registered hauliers pay by far the highest levels of diesel duty in the EU. In Luxembourg, where many international transport firms draw fuel, the duty level is a mere 23 pence per litre. Even net of the one-off investment in training called for by the RHA, UK hauliers will still be paying by far the highest duty level in the EU.
“The Chancellor has the power to kick-start a swift and effective reversal in the decline of the UK skills base in this essential service industry,” concluded Richard Burnett. “We have been calling on him to act for more than a year and these figures demonstrate that government support for the industry on which the entire economy relies not only makes sense for growth – it can be self-funding and will boost Treasury coffers.”