The government needs to cut extra costs or the haulage industry will fail to thrive


Next week, the Prime Minister, Rishi Sunak, will unveil the first full budget of his ministry. I recognise that there will be a lot of different pressures acting on it, as well as the need to balance investment in our future with fixing the public finances.

Nonetheless, this country’s growth depends on an effective logistics network. Businesses need to receive goods in a timely manner, and consumers need to know that the shops will be stocked. If logistics aren’t functioning, every sector of the economy suffers.

Despite working throughout the pandemic and keeping the country supplied, our members have been hit hard over the past couple of years. In just the past 12 months, our members have seen the operating costs of their HGVs jump by 20% on average, with fuel prices alone increasing by nearly 40%. Coach operators are suffering too. With these increases, many hauliers have seen their profit margins disappear – many are even operating at a loss.

Profit margins of just 2% on average, expensive and time-consuming checks and certifications, and poor driver facilities are also worsening recruitment and retention in the logistics industry. At present, we estimate that there is a national shortage of 50,000 drivers, and without Government action, this may well get worse.

As a result, we’re campaigning for the Government to introduce tangible measures to help the logistics industry, upon which so much depends.

First and foremost, we’re calling on the Government to reduce the cost of fuel through tax relief. Continuing the 5p cut in fuel duty and the fuel duty freeze is much needed.

Our members also need the Vehicle Excise Duty freeze to remain in place; our members, as well as the wider industry, cannot absorb any additional costs.

The HGV Levy also needs reform. While the Government made the right decision to suspend the levy during the pandemic, at present it is scheduled to come back into force in August. The Government needs to recognise that it should not come back in its present form. It’s a regressive tax – which falls more heavily on smaller hauliers and coach operators whose margins are too tight to upgrade their fleet every five years. It also disproportionately falls on domestic companies. While we accept that HGV operators should pay their fair share of road maintenance, the Government needs to make sure that EU-based hauliers are helping with the cost. Keeping supply chains moving is absolutely vital for the health of the wider economy – and the responsibility for that should be shared more equitably.

A 15p per litre essential user rebate would also give hauliers and coach drivers some breathing space. Crucially, this is an anti-inflationary ask, and the policy would bring this country in line with comparable support measures in Spain and France.

Our mission at the RHA is to fight for our members – 80% of whom are sole traders and SMEs. At present, the industry – upon which so many others depends – is struggling. Unless the Government acts quickly and decisively to cut these extra costs and share them more appropriately, then not just our industry, but many other sectors across the country, will fail to thrive.

First Published by RHA – Joe Scotting