The RHA is growing more optimistic that the government will provide extra support for the road transport industry after weeks of “frustrating” discussions with roads minister Baroness Vere.
RHA chief executive Richard Burnett told motortransport.co.uk that initial approaches to the DfT seeking extra help for hauliers over and above the Coronavirus Job Retention Scheme (furlough) and Coronavirus Business Interruption Loan Scheme (CBILS) had been rebuffed.
But following a letter sent to PM Boris Johnson signed by six industry bodies seeking additional measures including cash grants of £700 per truck per week to help cover fixed costs and cuts in VED and fuel duty, Burnett said that this week there had been a “breakthrough” in talks with ministers.
“There are signs that the government is finally getting it and now understands the scale of the problem,” he told motortransport.co.uk. “There are so many hauliers going into liquidation that the recovery of the economy after lockdown will be severely affected unless action is taken now.”
A survey by the RHA indicated that around half of all HGVs are currently laid up, and with no income and mounting debts few hauliers have been able to prove their future financial viability in order to secure bank loans.
In a letter sent to chancellor Rishi Sunak today (30 April), Burnett called for 100% government-backed debt support, a move to a more flexible weekly furlough of staff and a fuel duty suspension and rebate for hauliers.
He recommended that fuel duty should be cut and rephased based on a monthly review mechanism due to the absence of backhaul efficiency.
Burnett also called for a business rates holiday for all hauliers' sites and a lorry retention scheme for out of use vehicles - to be agreed by specific sector as each is unlocked and volume returns.
“Loans are not what hauliers need,” said Burnett. “With their customers also in lockdown and defaulting on payments, debts are already growing as fixed costs on trucks such as lease payments and VED still have to be paid. We are calling on the government to cover these payments by either making direct cash grants or taking over these debts which would in effect turn into a grant if the money was never recovered.
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“This would ensure the industry is in a position to restart once the lockdown is over.”
Burnett said that a reduction in fuel duty would be welcome for those hauliers still running their vehicles but is no help to operators with trucks parked up and staff on furlough. One RHA member is owed £800,000 by customers and had been turned down for a CBILS loan twice.
“He needs £750,000 to see him through,” said Burnett.
Maintaining a strong UK transport industry will also be vital to the UK’s food security as many continental European operators that the country has grown to rely on for food imports are now starting to fail.
“More UK operators are being asked to go to Europe as continental operators are now going out of business,” Burnett added.
If hauliers fail en masse that could in turn put pressure on the contract hire and leasing companies which now own a quarter of all HGVs in the UK. With no national policy for leasing companies to grant operators payment holidays, every haulier is having to negotiate separately with its suppliers.
“The leasing companies’ cash flow is also under pressure and many cannot afford to give payment holidays,” said Burnett. “But the last thing they want is large numbers of their customers going bust and the trucks coming back as the market for used trucks has collapsed.”
