RHA is calling for Chancellor John Healey to take action to support the haulage industry in his first Budget next month, as rising energy and food costs continue to put pressure on transport operators.
Pointing to oil prices rising above $100 a barrel, RHA managing director Richard Smith, warned that the combination of energy and food price inflation, coupled with continued economic uncertainty, presented a growing threat to the already tight margins of haulage businesses.
His comments follow a warning from Bank of England Governor Andrew Bailey to MPs that the risks to inflation remain “on the upside”, with energy price volatility continuing to be a key concern as the conflict in the Middle East weighs on the global economy.
Brent crude has risen above $100 a barrel, having traded at around $70 before hostilities began at the end of February.
Smith said the impact of more than six months of global turbulence was now being felt across the economy, with little sign of an easing in the outlook.
The Food and Drink Federation is forecasting that food inflation will approach 4% by Christmas and continue rising into next year, potentially reaching 6.4% in July.
Smith said the rising cost of moving people and goods would add to the pressure facing businesses across the supply chain.
“Our low-margin industry is already struggling with cost pressures as hundreds of transport businesses go bust every year,” he said.
With the Chancellor’s Budget due on 28 October, the RHA is calling on the government to scrap a planned increase in fuel duty in the new year and abandon plans to link the duty to RPI from April.
Smith also wants ministers to introduce an “essential user” fuel rebate, similar to schemes operating in other countries, to reduce the cost of fuel for transport operators and other businesses in the supply chain.
The RHA is additionally calling for incentives to encourage the use of lower-carbon fuels such as hydrotreated vegetable oil (HVO), arguing that a rebate would help operators investing in fleet decarbonisation.
Smith acknowledged the pressure on the Chancellor to support businesses across the economy but said transport deserved particular attention because of its essential role in keeping goods and people moving.
“The Chancellor has an incredibly difficult balancing act to strike with every sector delivering their strong cases for support,” he said.
“We will too, making the point that our sector is an undeniably key economic enabler.”
He added: “Our message to Mr Healey ahead of the 28 October Budget is to back the businesses that keep Britain moving.”
