22 ÓCentre for Economics and Business Research Although the estimated impact on costs of between £221 and £970 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. 4.10. Impact on HGVs We have made two calculations for the impact of a 12p 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 12p rise in fuel duty of £3,193 per annum. But real-life usage is much higher – the average in the official data is obviously reduced by vehicles that are not really in use. The Road Haulage Association has suggested a typical usage for an articulated vehicle of 85,000 miles a year. With that level of usage, the cost of a 2p rise will be £6,704 per annum. If the external environment were stable, the effects of such taxes would be incremental. But it is not. As with LGVs, the sector has been plagued with road closures, lane closures, additional speed limits, increased enforcement penalties, increased congestion charges and the traffic jams resulting from this action. The situation in the HGV road haulage industry is not stable. Traditionally about half the fleet of HGVs are owner operators, but the number has been falling at about 2% per annum. The average age of an HGV driver is 55; but over-60s represent 13% of all drivers while only 2% are under 25s. The market is highly competitive and the estimated margin in 2018 was only 1%. Because of the introduction of the Driver Certificate of Professional Competence in 2014, the cost of training to be an HGV driver has gone up sharply. So this is an essential industry which is in crisis, with its problems substantially exacerbated by recent actions by various tiers of government. Its labour force is ageing and there is likely to be a major shortage of drivers within 10 years. Owner operators are giving up. In the circumstances, a further government-imposed tax might have a cumulative impact well in excess of the effect of a normal tax rise. At the same time the industry is an essential link in the modern logistics chain, made of even more vital importance in keeping the country alive during the Covid problems. It would be dangerous to disrupt the industry further.
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