Thank You Chancellor

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Thank you Chancellor, you obviously took note of my recent Blog. I recently blogged under the title of “Chancellor needs to do another U turn” and he has done just that. He has postponed the 3p per litre increase in fuel duty due to be implemented on 1st August this year. If he had carried on and implemented the increase it would have had a dreadful effect on every business and every private individual in this country.

At the moment it is postponed until January but it needs to be scrapped altogether or at least wait until the economy is well on the road to recovery. Everything in this country is affected by the cost of fuel because everything you have in your home, office or school once travelled on a truck. And a truck uses diesel to enable it to move and transport these goods so every penny more it costs to move an item of clothing or even a packet of cornflakes means you pay higher prices in the shops.

Chancellor please now go one small step further. Reduce the rate of duty on fuel, and do this quite dramatically.  I know you need the money for the economy so increase the VAT on fuel accordingly so keeping the pump price roughly the same. You can then change the rules so only essential road users can reclaim the VAT on road fuel. This way it is not inflationary in fact it would be deflationary as the savings will end up getting passed down the line ultimately to the consumer whether the haulier likes it or not his customers will demand it. This way the cost of transport will reduce so helping the economy and the consumer and it will cost the treasury very little or nothing if the numbers are balanced properly. In fact every time the base cost of fuel rises the Chancellor will benefit from the VAT.

All the mechanisms and staff are in place to administer this so there would be no additional operational cost to the treasury. It would only be the numbers that change not the systems and procedures.

Go on Chancellor it’s a no brainer. At no cost to your coffers you can help grow the economy and give everybody in this country a bit more in their pocket.

Chancellor Needs To Do Another U turn

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The press are making the most of the Chancellor making three U turns following his March budget but he needs to make a fourth and more vital U turn urgently.

In August fuel duty is to rise by 3 pence per litre. This can not be allowed to happen when the economy is already back in recession, inflation may be reducing but is still well above target and with many companies and individuals struggling to survive. “If you’ve got it a truck brought it” so any increase in diesel cost adds to the cost of all goods in shops so increasing inflation even more.

Every one penny increase in diesel costs every truck in this country an average of £398 per year. This means that since October 2010 the cost to operate a truck has gone up by over £100 per week or £5,000 per year.  For a relatively small 20 vehicle fleet that is over £100,000 per year.  An increase in cost that provides no benefit to the company at all and an operator is unlikely to get all of that increase back from his customers. Is it any wonder that the number of transport operators going out of business is on the increase.

I would urge all readers of this blog to contact their MP urgently to try and persuade him or her to vote against the Finance Bill coming up that will enact the measures contained in this year’s Budget, including the fuel duty increase. Already 28 MP’s have pledged to vote against the bill but many more are needed. If you do not know who your local MP is or need help to compose a letter to your MP please contact either the Road Haulage Association or the Freight Transport Association and they will help you.

The Chancellor may have done a U turn on the price of pasties but they will be costing more anyway if fuel duty goes up because guess what,  their ingredients and the finished product all travel on a truck.

Mr Cameron When Will You Help SME’s To Help You?

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We all know that the Government still has to be very careful about what they spend or give away but when will they realise that it is the small and medium size enterprises (SME’s) that are going to grow us out of this recession not the large corporations.

The large corporations have the ability to move manufacturing, assets and their money around the world in order to minimise their costs and tax liabilities. The SME’s are firmly fixed in this country. Proportionately they pay more tax to the UK Government. The more they earn the more they pay the chancellor. We hear lots about the Government helping small business but we have seen little evidence of this so far.

If National Insurance was waived for employers of 50 or less people and reduced by half for those employing 100 or less this would be a huge boost to letting SME’s grow and employ more people.  This extra employment would reduce the benefits that the Government pay to the unemployed and the extra employed would in turn be paying more income tax, so the actual cost to the Chancellor would only be minimal.

Mr Cameron talks about reducing red tape, I haven’t seen much happen on this front.    SME’s are the future and the lifeblood of this country. They are the ones that struggle with over regulation, high Government imposed cost and little support. Help them and they will help the country grow out of this recession. They will not be moving their money abroad benefiting someone else’s economy. Their profits, when they make them, will be re invested or distributed here in the UK.

Come on Mr Cameron help the SME’s and they in turn will help you to achieve your targets.

Robbing The Rich To Pay The Poor

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Every day, ten men go out for a beer or three and the bill for all ten comes to £100. They all have different incomes but they are also friends. They decide to split their bill in the same way that income tax operates so that they could all afford to continue to meet up every day.
When they worked it all out the division was as follows:-

The first four men (the poorest) would pay nothing.
The fifth would pay £1.
The sixth would pay £3.
The seventh would pay £7.
The eighth would pay £12.
The ninth would pay £18.
The tenth man (the richest) would pay £59.

They met up for their drink every day and seemed quite happy with the arrangement, until one day, the landlord threw them a curved ball. “Since you’re all such good customers I’m going to reduce the cost of your daily bill by £20″. So their drinks bill dropped to £80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected – they would still drink for free. But what about the other six men – the paying customers? How could they divide the £20 windfall so that everyone would get his ‘fair share’?

They realized that £20 divided by six is £3.33. But if they subtracted that from everybody’s share, then the fifth and sixth man would each end up being paid to drink his beer! So the landlord suggested that it would be fairer to reduce each man’s bill by roughly the same amount and he proceeded to work out the amounts each should pay. And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid £2 instead of £3 (33% savings).
The seventh now pay £5 instead of £7 (28% savings).
The eighth now paid £9 instead of £12 (25% savings).
The ninth now paid £14 instead of £18 (22% savings).
The tenth now paid £49 instead of £59 (16% savings).

Each of the six was better off than before and the first four continued to drink for free, but then they began to compare their savings. “I only got one pound out of the £20″ said the sixth man. He pointed to the tenth man, “but he got £10″! “Yeah, that’s right”, exclaimed the fifth man. ‘I only saved a pound too. It’s unfair that he got TEN times more than I did”!  “That’s true, why should he get £10 back when I got only two? The wealthy always get all the breaks” said the seventh man.

“Wait a minute”‘ yelled the first four men in unison, “we didn’t get anything at all, yet again the system exploits the poor”! All nine of them got so angry that they surrounded the tenth man and beat him up.

The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something very important….they didn’t have enough money between them to settle even half the bill!

And that, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is not always built on envy.

For those who understand, no explanation is needed. For those who don’t understand, no explanation is possible!

Help Manufacturers to Help Us

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When a manufacturer decides to move his production abroad it is not just his direct employees that are affected. Invariably goods that are imported from abroad, especially from elsewhere in Europe, are brought into the UK and delivered by foreign based vehicles. With the cost of UK taxes, fuel and other costs the UK haulier is not competing on a level playing field so it becomes very difficult to compete with foreign based hauliers for this work.

The answer is that there should be more support for manufacturers so that we do not lose manufacturing to regimes that give support and tax breaks abroad in the first place. UK  businesses need more tax breaks and positive support for research and development.  This extra support can easily be made conditional on the resulting manufacturing taking place in the UK. How many times have we seen in the past a British idea being taken abroad for development and then production.

We once had a healthy balance of payments in this country but since so much manufacturing has closed down or been driven abroad we have relied on service industries to earn our export revenue and our balance of payments now runs at a deficit.

The Chancellor should be supporting UK manufacturers to develop and manufacture their products in the UK which will not only provide direct employment but will also provide jobs in the support industries such as transport. So in turn fewer unemployed and more tax revenue for the Chancellor. We all know the saying that you have to speculate to accumulate well here is where a relatively small speculation will provide a major accumulation for the UK economy.

Chancellor Misses Opportunity to Help the Economy

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The Chancellor missed a golden opportunity in his latest budget to give the economy a boost.  A reduction in corporation tax is always gratefully received but what we need is for something that will encourage corporate investment now.

A new 44 tonne artic and trailer can easily cost in the region of £100 k. A £25 k capitol allowance limit will not encourage much new equipment to be purchased. If the Chancellor encouraged corporate investment in equipment there would be an immediate improvement in business for manufactures and the whole supply chain so helping us to trade out of our current position,  as the Chancellor says he wants us to do.

The other opportunity missed is the splitting of car fuel and fuel used by essential road users such as hauliers and coach operators. Car drivers may not like the options but generally they do have a choice whether to use their car or not. Hauliers and coach operators don’t have that choice.

We understand that the Chancellor can not afford to lose the revenue from fuel or be seen to be encouraging higher mileages from private motorists but if he splits the two users of fuel and reduced the burden on the professional operator, by way of a rebate or other mechanism, the cost savings would be passed to their customers. In turn this would be passed onto the high street and your pocket. Remember if you’ve got it a truck brought it, and that truck burns diesel. Reduce the trucks’ operating cost and in turn that means the goods it carries will be cheaper for you to buy.

In overall terms this would not be that expensive as trucks only use a very small percentage of road fuel  but it would make a significant difference to the cost of living and in turn create more revenue for the Chancellor. So it would be self-funding and help the economy to grow.

What Are Hauliers Expected To Do With Their Old Trucks?

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Since January this year unless an HGV has an engine at least of Euro 4 specification it is not allowed to operate in London without paying a £200 per day non compliant fee.

Unless based in the South East most operators can simply choose not to send non compliant vehicles inside of the M25. The problem is that other cities are now jumping onto the band wagon. Oxford has set a date  of 1st Jan 2014 for buses to be euro 5 compliant and you can be sure HGVs will be added to the list soon. Birmingham, Sheffield and Manchester will probably be making announcements along similar lines soon and others are bound to follow.

No operator wants to deliberately cause pollution. They don’t even go into city centres by choice but they will go wherever their customers want goods to be delivered.

A non compliant euro 5 vehicle is not necessarily an old vehicle. It can be as little as 5 or 6 years old.  It could well have cost best part of £100,000 to put on the road when new.   Would  you want to be told that you could not take your 5 year old car into a city.

By prematurely shortening the operating lives of trucks because cities will not let them in they will loose their second hand value as no one will want to buy them because they could not operate them. This means that they will have to be depreciated over a shorter life so putting up the cost of everything they deliver which in turn will put up the cost to the consumer and in turn inflation. Remember “if you’ve got it a truck brought it”

Each generation of new trucks is greener and less polluting than the last so why not let them work their normal lives and work their way through the system.

Who Does Quantitive Easing Really Help?

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Who does quantitive easing really help? We are told that the Bank of England injects  money into the economy to help stimulate growth. They do this by buying Government bonds off of the banks and institutions. The theory being that this puts extra money into the system to stimulate growth.

In practise we see the banks and institutions that caused all the economic problems making bigger profits and paying huge salaries and bonuses and only a very little dribbling into the economy.

As far as I can see the only benefit of this printing of new money is that it helps to keep the value of the pound down so helping exporters. We hear that the euro is in trouble and the dollar is struggling and yet the pound is 20% lower in value than it was a few years ago.

If our spending power is to be reduced in this way shouldn’t we get better value for our money. If the billions that have been used to buy Government bonds had been used to invest in our infrastructure instead I am sure we would be better off. For three hundred billion pounds we could have built the HS2 rail scheme, built many of the bypasses that we so desperately need and sorted the M6 congestion problem.

All of this would have generated thousands of jobs, taken lots of people off the dole queues and in turn earned increased tax revenues for the chancellor. It would have had the same effect on the value of the pound and created good solid growth and taken us well out of the threat of re-entering recession and left legacies for future generations not just liabilities.

C’mon Mr Chancellor, Help Us Grow Out Of This Recession

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According to Transport News hauliers pay £25.12 per hour on average not to the driver,  who probably earns less than half of that,  but to the chancellor in fuel duty for each and every of their artics on the road. On average that is over £45,000 per vehicle per year.  That of course is not the only money hauliers pay in taxes.

The last two proposed fuel duty increases were not implemented, we were relieved. We nearly enjoyed a 1p reduction in duty as well. The first duty reduction I can ever remember.

We all understand the state of the economy so understood when the Chancellor passed our 1p reduction onto the fuel companies as an increase to them. They in turn then put up the price of diesel by 2p to hauliers. What a coincidence.

Every business in this country is wasting its time producing anything if they can not get it delivered to their customers and normally that means by truck. If you’ve got it a truck brought it.

Shouldn’t the Chancellor be reducing the tax burden on the haulier so that it can be passed onto industry and then in turn to the consumer so stimulating demand and helping us to grow out of recession?