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Road freight rates

Volume 745: debated on Wednesday 21 February 2024

To the House of Commons.

The petition of residents of the constituency of Linlithgow and East Falkirk,

Declares that the road haulage industry contributes to approximately £13.5 million annually to the UK economy; further that everything we eat, drink, wear and consume depends on road haulage services and the companies and drivers that operate them; notes that 98% of all food and agricultural products in the UK are transported by road freight; further that road freight rates have seen their biggest increase in almost a year, with UK rates climbing by 3.3%, month on month, in September, which is the sharpest rise since December 2022, according to the TEG Road Transport Index; and further that, this in part has been propelled by the reintroduction of the HGV levy, clean air changes, rising fuel prices and higher business charges.

The petitioners therefore request that the House of Commons urge the Government to consult with the road haulage industry to introduce tailored support to ensure that companies can continue to operate.

And the petitioners remain, etc.—[Presented by Martyn Day, Official Report, 6 February 2024; Vol. 745, c. 219.]

[P002907]

Observations from the Parliamentary Under-Secretary of State for Transport (Guy Opperman):

The Government understand the significant role that the road haulage industry plays in keeping goods flowing across the country and our borders, and in supporting the wider economy.

Following publication of our “Future of Freight” plan, the Government set up the Freight Council, which is jointly chaired by industry and the Minister for Roads and Local Transport. The Freight Council is an established forum providing a direct channel for industry’s concerns to be heard and to work with the Government on future policy for the sector.

Rates charged by the industry, as measured by the TEG index, are market driven and not set by Government. It is worth noting that the latest data, for January 2024, has shown a decrease of 10.8 points, marking the lowest overall price since March 2023, and lies 2.5 points lower year on year— https://transportexchangegroup.com/road-transport-price-index/road-transport-price-index-january-24.

The road freight sector provides key transportation services to other sectors of the economy. Consequently, demand for its services is linked to domestic consumption and production levels. There are currently no plans to consult with the road haulage industry to introduce tailored support.

However, the Government acknowledge the pressures that the industry has faced in recent years and have taken decisive action to support the sector. This has included a range of HMG interventions in response to the acute HGV driver shortage, including the £34 million investment from DfE to train up to 11,000 drivers through skills bootcamps and the motoring agencies’ work to increase driving test slots. Lorry drivers will also soon benefit from improved roadside facilities and safer rest areas as a result of significant investment from industry and Government via the “HGV parking and driver welfare grant scheme” and National Highways funding.

Moreover, at the 2023 autumn statement, the Government announced that they are continuing their support for haulage companies by freezing HGV vehicle excise duty and the HGV levy in 2024-25. This results in a tax saving for one of the most popular HGVs— a 38-44 tonne rigid lorry with 2 axles, EURO V-l—of a total of £47 per annum. These measures form a package of support for hauliers, alongside the freezing of fuel duty as announced at the spring Budget 2023.

Clean air zones are set by local government and the sector engages directly with local authorities on this issue.