Logistics UK has warned the Treasury that any increases in diesel duty, NI contributions or business rates in the Budget next month will push up prices for everyone and fuel inflation.
In its formal submission ahead of the Chancellor’s speech next month, the group said the haulage sector cannot shoulder any more tax increases without stifling growth across the economy.
It said the logistics sector employed 2.7 million people, 8% of the UK workforce and analysis showed the recent rise in employer NICs will already cost the sector an estimated £1.7bn this year.
Acting chief executive Kevin Green said: “The Chancellor has said she is planning targeted action to bring down inflation and it is vital she understands that increasing fuel duty would run the risk of doing the exact opposite.
“Fuel accounts for around a third of the cost of operating a 44-tonne HGV, so as well as driving up inflation, increasing fuel duty would harm the health and competitiveness of the sector that already pays more than £5 billion each year to the HMRC in fuel duty.
“The tax also hits smaller operators the hardest as they are often unable to negotiate contracts that enable them to pass on the increased cost of fuel to their customers.”
Logistics UK is also urging the Treasury to ensure reforms to the business rates system protect investment in logistics infrastructure and do not create additional inflationary pressures.
Green said: “Business rates are a significant fixed cost for logistics with warehouses, distribution centres and logistics hubs across the country facing rising bills.
“Plans for a higher multiplier on properties with a rateable value above £500,000 will disproportionately affect our sector.
“The business rates reforms, as they are currently proposed, will add millions to operators’ costs, which will ultimately be passed on through supply chains to retailers and consumers.”
This week, fuel carder provider Allstar said the Treasury needed to incentivise the switch to cleaner fuels by cutting duty on alternatives.
