Haulage industry builds bonds that enrich farming sector
In a world where it has become ridiculously easy to sit on the sidelines and throw stones, I was given a pleasant opportunity this week to do what the Bard referred to as “see ourselves as others see us”. Unaccustomed as hauliers are to having praise lavished on them, it was very refreshing to hear just that recently. This praise came not from a regulator but from someone whom hauliers regard as even more important – a customer.
At the RHA’s Agricon Conference in early April, Meurig Raymond, president of the National Farmers Union, stressed the essential bond between farmers and their hauliers.
“Farmers rely on a viable and efficient haulage industry,” he said, “and good hauliers have been an essential ingredient in the development of my own family’s farming business.” He was especially mindful of the service maintained during severe winters in recent years, when the dedication and skill of hauliers and their drivers ensured that livestock remained fed and milk was still lifted.
In his words, haulage and farming are “intrinsically linked”, and should anyone have any doubts as to the intrinsic links road freight transport has to the key sectors, they should read Prof Alan McKinnon’s Life without Trucks which investigates the effects that a failure of the road traffic system would have on the UK economy.
However, this got me to thinking. Is that essential link adequately recognised elsewhere in the business community and by politicians and regulators? Maybe, but not as widely as it should be. I do see positive signs that this is changing.
Fuel remains the biggest expense for UK hauliers, but through RHA’s work as part of Fair Fuel UK we have had some encouraging signs from the government in London. The freezing of fuel duty for the remainder of this parliament has been beneficial to UK competitiveness and to hauliers’ cash flow and profitability.
However, we need to consolidate the position that diesel duty remains by far the highest in the EU and an unprecedentedly high tax on the transport element of companies’ supply chain.
That is especially important for an economy such as Scotland, located on the geographic periphery of Europe. Due to the high duty level, foreign trucks are rarely fuelled in this country. The official figure is at most 2 per cent, and they only buy just enough to get them out of the country to a lower-cost diesel pump.
That being said, at least now foreign trucks are at last paying something for the use of our roads, thanks to the HGV road user levy, which went live on 1 April. It costs £1,000 a year (with daily or monthly options) and although it is less than we would like it is the best that can be done within EU law to narrow the haulage tax gap between the UK and other countries.
It has to be said that the levy is something of an unsung success for the coalition. It was brought in on time to a tight deadline. The RHA has given it strong support – as we did during constructive dialogue when the scheme was being designed by the Department for Transport and the Treasury.
The doubling of the Annual Investment Allowance in the Budget to £500,000 is a welcome sign that the government is looking like it is starting to “get it” in terms of SME businesses, whether that be in road haulage (a new articulated lorry costs anything from £100,000 to £250,000) or manufacturing. The RHA joined with others to reverse the coalition’s initial decision to slash the AIA to just £25,000.
We are also getting very positive signs from the Scottish Government of support and recognition for the industry, as our relationships and collaborative working opportunities grow.
It is in everyone’s best interest to look for these opportunities to grow the Scottish economy and it is incumbent on each sector to examine the best ways forward to do so. As we seek to bring back the manufacturing and process industry – and the jobs and wealth creation that go with them – we must recognise that reliable and efficient transport is an important consideration for investors.
I guess it just goes to show that sometimes, if you come off the sidelines, leave the stones in your pocket and collaborate with others to form the intrinsic links Meurig Raymond spoke of, you can do something positive for your industry, and also the country’s economy at the same time.
• Martin Reid is director of the Road Haulage Association www.rha.uk.net