Fuel duty rise ‘will push businesses over the edge’

Today's increase in fuel duty – the second in just five months – will push many businesses already struggling with the economic downturn over the edge, according to the Freight Transport Association (FTA), which is warning 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."

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. 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.

De Pencier continued:

"The Government has another bite of the cherry on 22 April when the Chancellor presents his Budget. If they take that bite, they are as good as signing the death warrants for some businesses and putting yet more workers onto the dole queue. At a time when jobless figures are already sky-rocketing, the Government needs to understand that such their actions will only add to them – and they will have been responsible."

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

De Pencier concluded:

"While we would never advocate – or support – direct action, we fully understand the frustration felt by those in the logistics sector. That much of the damage is being done by our own Government only makes it worse."