Increase in fuel duty is a disaster, says Hermes

Home delivery specialist Hermes has branded the Chancellor’s decision to implement a 3ppl rise in fuel duty as “a disaster for the haulage sector”.

Jon Tobbell, commercial director at  Hermes, says: “Whilst we welcome the freeze in Vehicle Excise Duty, it pales into significance when compared to the pain being experienced by hauliers as a result of the rising price of fuel.

“At Hermes we have seen a 30%  increase in fuel costs and now spend well over £10m annually. It has been almost impossible to manage this additional overhead without passing on additional costs to our customers.

“The failure to suspend the planned increase in fuel duty is a disaster for the haulage sector and a disaster for consumers who will ultimately experience price rises as a result.”

The FTA’s chief economist Simon Chapman adds: “The fuel duty increase of 3ppl scheduled for August will increase the average cost of lorry operation by around £1,200 per vehicle per year – all on top of other price rises which are inevitable as a consequence of the current and anticipated increases in the world price of oil.  Higher commercial vehicle operating costs inevitably impact on the price of everything we use or consume, and contribute to inflation and higher consumer prices.

“Mr Osborne has lost an opportunity to benefit every household in the UK and he must be persuaded to change his policy.  FTA cannot accept this situation and will join with colleagues in the FairFuelUK with the intention of reversing this decision."

Peter Carroll, founder of FairFuelUK says, ‘Diesel is at its highest price ever recorded and this failure to act is a devastating blow to families and businesses.  Poll after poll has set out that this is the number one priority for the UK.  Millions have people and thousands of businesses will feel ignored.

“We gave the Government evidence based on its own model that a cut in fuel duty would not cost it any revenue overall.  Our supporters will be astonished that the Government has cut the 50p rate because ‘it damages the economy’ but will not tackle fuel duty when it’s crippling the economy’,” he adds.

RHA chief executive Geoff Dunning says: “The Chancellor’s decision to go ahead with this rise is not only disappointing, the reason behind it is hard to understand.

“In the last Budget, the Chancellor seemingly understood the need to stop driving up fuel taxes and he actually cut duty. This time, he seems to have done a complete U-turn. We are struggling to achieve any growth and pump prices have reached record highs – yet he is driving fuel costs even higher.

“Diesel fuel is now the most expensive it has ever been - the RHA’s weekly fuel price survey last week hit an all-time record high – and yet the Chancellor will be driving costs up by another £1,200 a year for a large truck – costs that hauliers must now set about trying to recover from their hard-pressed customers.”