Adam Tugwell: Has the time come for the transport industry to receive a dispensation on fuel duty like agriculture?

Adam Tugwell, a Councillor in Tewkesbury, suggests that in light of more fuel protests the government should do more support the heavily taxed transportation industry.

Before beginning, I must declare an interest. With my political head ‘off’ just for a moment, I confess that I own and manage a distribution business and that I too am feeling the hit from the recent rises in fuel duty and oil prices. However, my weekly fuel bill is relatively modest in comparison to companies who run even 1 or 2 heavy goods vehicles and is completely eclipsed when you get into the realms of operators such as Stobart, Excel, Wincanton or BOC to name but a few.

Now it is easy to write off the concerns of hauliers if you take the line that the recent fuel hikes have hit all vehicle users, whether you are a 16 year old riding your first moped, or a seasoned executive driving that hate thing of the green lobby – yes, the 4x4. Agreed, we are all feeling the pain and it definitely hurts.

So what’s different about the transport industry and why might they have any kind of special treatment?

Without consideration of fuel, running large goods vehicles is already an expensive place to be. European Legislation has not helped this and if you were exploring your way into running just one lorry for the purposes of making profit, you would need to have an Operators License, which carries a flat fee, plus a regular charge for every vehicle, a named employee who holds a CPC (Certificate of Professional Competence – In Road Haulage Operations) and an operating centre, which must adhere to Planning and all the other considerations you can imagine. Your staff must have the appropriate vocational driving licences, which for articulated vehicles now have to be obtained in two parts and this is all before you consider the vehicle itself. 

This could easily cost you between £50-£100K (depending on the vehicle type), has taxation classes which range from hundreds to thousands of pounds and needs to be taken off the road roughly every 6 weeks to be checked for safety. If you think the low profile tyres on your M Series BMW were expensive to replace, think again and it’s then that we get to the fuel…

Lets go to the top of the spectrum, a 44 ton articulated lorry, towing a 44’ trailer. Lets say you were running it fully loaded from Worcester to West Birmingham, mostly up the M5 (a journey of about 24 miles) and then back, unlaiden except for a few trolleys or suchlike.

This would perhaps require 80 litres of diesel or even more and the vehicle itself will probably need to do at least 4 journeys of this kind in a 24 hour period to make it pay a decent wage. In simple terms, this would mean the one vehicle uses 320 litres of diesel in a day, that’s 1600 litres just for a 5 day week and 83,200 litres per year. Round that up and for every penny you put on the price of fuel, this will cost the haulier perhaps £832.00 per year, per vehicle.

So, when you consider that prices have shot up by at least 5p per litre before VAT in recent weeks and that this would equate to a rise for a particular haulier, with this kind of vehicle of about £4K per annum in fuel costs alone, you can perhaps understand why the industry is feeling just a little bit unnerved by the current situation.

On the other side of the coin, agriculture and its related industries have been able to use the red-died, duty free diesel for many years. Significantly cheaper without the duty attached, it has long been recognised that such work requires massive amounts of fuel to continue, especially within periods such as harvest and its subsequent cultivation phases. Surely the transport industry should now be assisted in the same, if not a similar way?

In real terms, companies have already moved their operations to the continent, because of the lower fuel duty costs associated with doing so. Jobs go with them, and there is no justice in crippling British firms and putting them out of the market to the benefit of European competitors.

Hauliers have no option but to pass on their operating costs to producers too, and if prices could be lowered for British farmers and growers, they might stand a better chance of competing against foreign producers who send their products over much greater, gas guzzling and environmentally compromising distances at seemingly lower prices.

Once these firms have gone, so has all of the tax that they inject in to the economy each year and once again, it isn’t British people who are being given British jobs. It’s time that the Government took it’s obligations to British industries and the environment seriously in the long term and realised that assisting your own cannot always be achieved by taxing them harder today.