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Fuel duty rise will damage freight sector

Today there has been an increase in fuel duty on diesel of 1.84 pence per litre. The Freight Transport Association (FTA) claims the increase alone will add almost £1,000 to the running cost of every truck.

The FTA says that this second increase in five months will push many businesses already struggling with the economic downturn over the edge, and warns of a sharp increase in insolvencies and job losses in the logistics sector.

Insolvencies in the logistics sector have already shown a marked year-on-year increase and FTA fears that this steady flow of firms going out of business will become a deluge in 2009. And with the number of HGV drivers claiming Jobseekers’ Allowance already rising by an incredible 236 per cent in 2008, the sector is bracing itself for further job losses.

Theo de Pencier, FTA chief executive, said: “Today’s fuel duty increase is the latest in a shower of hammer blows dealt to the logistics sector by the Government. What they are saying by their actions is that they don’t care about the more than two million people up and down the UK who work in this sector and keep the economy moving.”

The FTA also sounded a warning that this may not be the Government’s last attack on the logistics sector. With the Budget in just three weeks, there is every chance that the Chancellor may announce further rises. The FTA is strongly urging the Chancellor not to take this path which will almost certainly sound the death knell for businesses – and jobs – across the country.

Last month, the FTA, alongside its partners the British Vehicle Rental & Leasing Association, the Federation of Small Businesses and PetrolPrices.com, launched the Every Penny Counts campaign, urging the Government to rethink its plans to increase both fuel duty and the fees levied by the Department for Transport’s executive agencies. Those calls fell on deaf ears and it was announced last week that test fees levied by the Vehicle & Operator Services Agency (VOSA) alone would increase by an eye-watering nine per cent.

While the FTA continues to resist calls from some parts of the logistics sector for direct action, it concedes that frustration with the Government is high.