Fuel tax rise warning to Treasury
Updated on 21 October 2008
Any Treasury plan to inflict taxes on the transport sector to replenish depleted funds would hit the consumer hard, a freight association warned.
It has been suggested that the planned 2p a litre rise in fuel duty postponed this autumn could be reintroduced next year.
But the Freight Transport Association (FTA) said on Tuesday the Treasury should "think carefully before setting off down a path of further transport taxes".
FTA chief executive Theo de Pencier said: "To apply an increased tax burden through fuel duty or vehicle excise duty may seem to the Chancellor like a quick fix for the Government's financial problems, but the reality is that those costs will be felt by consumers.
"Additional transport costs will ultimately be passed on to shoppers who, like everyone, are feeling the effects of the credit crunch. At a time when the Government is looking at ways of kick-starting the economy, to add to the transport tax burden would be a retrograde step."
The FTA said it was calling on Chancellor Alistair Darling to make an unambiguous commitment to decouple duty applied to diesel for heavy goods vehicles (HGVs) from that of other road users.
It added that such a move would let the UK compete more effectively in European road transport markets and allow companies to invest further in their workforce and fleets.
Mr de Pencier said: "As a former transport secretary, the Chancellor well knows the difference between the essential journeys made by HGVs and those undertaken by other road users.
"We are not looking for a handout, more an understanding from him, and the Government as a whole, that the logistics industry keeps the UK economy moving, literally and figuratively."
Commenting on a report that the 2p rise in fuel duty could be announced before the end of the year, a Treasury spokesman said: "All taxes are kept under constant review. We never give indications of tax announcements ahead of pre-Budget or Budget statements."
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