Is decoupling the fuel answer

That perennial chestnut � the essential user rebate on fuel duty for hauliers, has raised its head again in the UK. This time round the haulage industry has re-branded and repackaged the concept as �decoupling�. What hasn�t changed is the hauliers� steely determination to force the British government to re-think its policy on taxing hauliers. John Loughran reports�..

Hauliers in Northern Ireland and Britain are facing the prospect of paying 5stg per gallon for diesel in the near future. To add insult to injury the British government is keen to add another two pence per litre to excise duty on diesel April 1.
While hauliers in the Republic have every right to moan about the escalating price of diesel, which is being somewhat offset, by the strong value of the euro against the dollar, their plight pales into insignificance when compared to their counterparts in the North and across the water.

While countless hauliers in the North are availing of cheaper prices in the Republic, and those hauliers based in the UK that are involved in international haulage, are no doubt filling up on the Continent, the cause of thousands of haulage companies looks bleak.
Last autumn rumblings of fuel protests across the UK were heard on the wind. However, the protests that took place, by all accounts, were tame affairs and hardly resembled those vociferous protests in 2000.
Hauliers, it would seem are putting their faith, for the time being at least, in a proposal that would see excise duty on diesel for commercial use, decoupled from diesel for private use.

In practice this would mean, that ordinary motorists would continue to pay excise duty at the current or perhaps higher rate, while hauliers, through decoupling, would pay at a lower rate, with presumably no loss to the Exchequer.
This proposal sounds awfully like the Essential User Rebate (EUR) system that was mooted in the UK and in the Republic, but fell on the deaf ears of both governments.

Both the Freight Transport Association (FTA) and the Road Haulage Association (RHA) have demanded the introduction of decoupling in recent months and are steadily increasing the pressure on the UK government to deliver.
The FTA with members operating some 220,000 goods vehicles – around half the national fleet - says that the Government must recognise the problems generated by the rocketing price of diesel and act to reduce the tax burden,which is penalising UK industry.
The FTA says that the Government should reverse the recent 2p per litre increase in fuel duty and consider means of separating the way fuel is taxed on essential users such as commercial vehicles from the way fuel is taxed for use in private cars.
The FTA says that bulk diesel prices have risen by 23 per cent over the last three years and that, mainly due to fuel prices, inflation is rising at 6.5 per cent in the road freight sector, as opposed to 2.5 per cent in the wider economy. For a heavy goods vehicle, fuel now accounts for 32 per cent of operating costs.

FTA Chief Executive Theo de Pencier said: “With the $100 barrel in sight, there can be no doubt that fuel costs for industry, delivering the economy, will continue to increase. If you’ve got it then it has been in the back of a lorry and the price of operating that lorry is rising remorselessly. Those increased costs will ultimately impact on every UK consumer.
“The UK transport industry is the victim of excessive taxation, and the Government must move to correct this long-term problem as soon as possible. In the meantime, members of the Freight Transport Association totally reject calls to undertake direct action in the form of blockades or other on-the-road protests. The FTA wishes to engage with Government in order to solve the present difficulties being experienced by some sectors of the transport industry. FTA members are all about delivering the goods – not preventing their delivery.”

In a bid to up the ante, the FTA says that customers buying diesel should be told just how much tax they are paying in the process.
The FTA would like to see fuel receipts issued at filling stations detailing the price of the diesel itself, the fuel duty and the VAT. The FTA says that the Government’s proposed increase in fuel duty of 2p per litre on 1 April should be scrapped and that users should be absolutely clear on the extent of the tax, which they are already paying.

Meanwhile, the RHA is banging a similar drum in an attempt to force the government’s hand on the issue. Members of the Scottish Parliament were invited to attenda reception held by the Road Haulage Association last to highlight the plight of local hauliers who are suffering under the weight of fuel increases.

Scottish First Minister Alex Salmond was among those who listened to RHA Chief Executive Roger King on the issues concerning fuel taxation and the profitability of Scottish hauliers in particular and the British haulage industry in general.
"I was very impressed with the understanding of our industry's case among MSPs and it was gratifying to receive total support for everything we are doing to bring the plight of the industry to the attention of the UK Government," said King.
He continued: "MSPs promised to keep the pressure on in the Scottish Parliament, especially in view of the very high cost of fuel in the outermost reaches of Scotland.

" All agreed that the foreign haulier, operating in the UK and fuelled with cheap European diesel, represented unfair competition, particularly for Scottish hauliers. But there was also widespread understanding that the magnitude of hauliers' fuel bills had now reached the stage where many were questioning whether they could stay in business. Hauliers present gave examples of just how much their fuel bills had gone up in the last 12 months. Such graphic examples caused widespread consternation among the MSPs.
"This was a very successful example of bringing the industry's case to our legislators and certainly, as far as Scotland goes, we have very strong support."

Both associations have ruled out the possibility of fuel protests and have actively discouraged their members from taking part in such wildcat actions.
For the moment, it seems both associations are happy to pursue a dialogue on decoupling. Watch this space!