CEBR Fuel Duty Impact - Nov 2020

15 © Centre for Economics and Business Research • Gardeners • Firefighters • Tree surgeons The changing face of the van driver 15 in the UK as a result of online activity (and presumably given a boost by the pandemic) makes them critical to the operation of the economy. A Cebr study for Ford to celebrate the 50 th anniversary of the Transit Van showed that van-dependent businesses contributed a total of €584 billion to the major economies of France, Germany, and the U.K. in 2014 – an increase of 16 per cent compared with 2010, and an amount approaching the overall economy of Switzerland. Because vans are predominantly used for conveying goods or tools there is very little scope to replace them. We have done two calculations of the cost of a 2p increase in fuel duty for van drivers. The first assumes the DfT van usage of 13,500 miles a year, which might be typical for a builder who uses the van to get to a job and then to collect items during the day, the cost a 2p hike in fuel duty is £36.80 per annum. For a van used full time – say a 3.5 tonnes van doing 40,000 miles per annum which is the sort of usage for the likes of DPD, DHL, Parcelforce – the annual cost of a 2p rise in duty would be £161.60. The most basic plug in hybrid Ford Transit costs £ £39,145 16 excluding VAT so given the limited electric only range hybrid or electric vans probably are not yet economic in most applications. Although the estimated impact on costs of between £37 and £162 may appear small, they have to be considered in context. Many van drivers have had to face a sharp increase recently in the range of restrictions on them from road closures, lane closures, 20 mph speed limits, increased congestion charges and associated enforcement penalties. On top of this, these measures have created unnecessary traffic jams which have further penalised the sector. Many van drivers are now refusing to work in major cities as a result of these measures and imposing an additional tax on them at this time, when the industry already feels hard done by as a result of the penalties already imposed on it would provoke maximum resentment. 3.8. Impact on HGVs We have made two calculations for the impact of a 2p fuel duty increase on HGVs. The first uses the data from Transport Statistics of Great Britain where the average usage emerges from dividing total usage by number of vehicles. This gives an average mileage of 42,900 miles per annum. At a typical mpg of 8.3, this would imply a cost of a 2p rise in fuel duty of £532.20 per annum. 15 Economics of Commercial Van Usage Across Europe, a new report compiled by the Centre for Economics and Business Research (CEBR). 16 https://uk.motor1.com/news/372699/ford-transit-phev- pricing/#:~:text=The%20hybrid%20van%20will%20be,at%20%C2%A339%2C145%20excluding%20VAT.