Vive la Revolution
January 1st 2011 The combination of the rise in world oil prices and increases in fuel duty and VAT reminds Geoff Dossetter of the fuel protests of 2000 but it is a different kind of revolution he is advocating
In September 2000 French farmers and routiers mounted fuel price protests blockading roads and ports and other facilities in northern France. The result was a paralysis of cross- Channel vehicle movements. In turn this led to queues of Europe bound lorries being held in Operation Stack on the M20, generating Kent wide traffic congestion, delivery delays, and extra costs for UK and international road transport operators.
As the then spokesman for the Freight Transport Association, I stood on a motorway bridge in front of a TV camera surveying the chaos and got stuck in to the French culture of street action.
‘Can you imagine this sort of thing happening in the UK?’ I wailed, telling the nation with great moral righteousness, of my faith in the British way of doing things, which wasn’t like this. I did so with a total lack of foresight.Within a few days blockades at UK fuel depots by UK protesters were exactly what was happening and there followed a week of crisis as the absence of fuel threatened to destabilise the logistics sector, and halt industry, commuters, supplies of food and drink, and the whole operation of the UK!
A few days into New Year 2011 I was reminded of my humiliation when I read a report which quoted David Handley, a leader of the 2000 actions, as saying ‘the cost of fuel which sparked the protests in 2000 pales in comparison to what it is now’.
And so it does. Following the increase in fuel duty, the increase in VAT and the increase in the world price of oil, UK pump prices for diesel in early January reached over 130p per litre. And for lorry operators, who of course do not pay VAT, the bulk price reached over 104p per litre. Bulk diesel prices are now an astonishing 65 per cent higher than they were in 2000! It makes your eyes water!
So, are we to expect a repeat of the 2000 experience? I certainly hope not and, at present, the good news is that there are no signs of it, despite the anger and resentment which sweep across pretty much all lorry operators.
One argument asks - ‘Does the price of fuel actually matter?’ After all, every commercial vehicle uses fuel and the same price, more or less, applies to all of them. So fuel does not represent a competitive issue.
Well, up to a point Lord Copper. Prudent fuel buying, stocking, route planning, vehicle utilisation and, crucially, efficient driving can and do make a difference.With these prices continuing, then every transport manager absolutely must review his operation and ensure that every journey counts and every turn of the wheel gets the best result.
The darned stuff is now so valuable that its use must be managed to the last drop.
But the industry’s real complaint is actually far more fundamental and has been the subject of largely unsuccessful complaints for more than twenty years now. How crazy is it that one element of such a complex cost operation as road transport should represent such a significant proportion of the total operating costs. No less than 35 per cent of the cost of running a lorry is the fuel cost, and for some vehicles it can go even higher.
Bearing in mind that absolutely everything has to be moved then the transport sector is right to complain that the cost of fuel impacts on the price of everything else which industry and the public use and consume from a packet of fruit gums to a grand piano.
And the irony is that the Chancellor’s actual target for fuel taxation is not the commercial vehicle at all, but the private car.
However, because the same system of taxation – fuel duty – is applied in the same way for cvs and cars, then lorries and vans get caught up in the process and are obliged to pay the same increased bill every time the motorist is targeted.
The solution, as promoted by the logistics industry, is simple. Produce a new way of taxing fuel for commercial vehicles and decouple the process from the car driver.
It really isn’t complicated and, over the last two decades, the industry has suggested a number of ways in which it could be done including a specific new grade of fuel, a VAT arrangement, or some form of movement charge.
Last year the coalition Government said that it had plans to introduce a new scheme of Lorry Road User Charging, one means of breaking the link. Lorries will be charged on their specific movements and the fuel duty they pay will have to be scrapped or considerably reduced.What’s more, Transport Minister Mike Penning said: “The Prime Minister, the Chancellor, the Secretary of State and myself, passionately believe that you (the industry) are taxed too much already. I’m not going to bring in a roads charging scheme that costs you money.’”
Which, with great respect to a Minister who really does seem to be on our side, all sounds a little hollow this month.With the pain of the rising oil and tax levels continuing, then Mr Penning and his colleagues really must turn words into deeds and solve this problem. Excessive fuel taxation, and that is what we have, is an operating tax on an industry which is acknowledged to be key to the health of the whole economy. It is a very bad policy. Bad for the transport and logistics sector. Bad for the rest of UK industry. Bad for the consumer. Bad for the economy. Plain bad. And it should end.
Or maybe we will see a return of the French experience... More articles from Handling & Storage Solutions: | 
