It comes after the Road Haulage Association (RHA) lobbied government to axe a tariff on lorries in the event the UK leaves without a deal. Instead, for the first year after the UK leaves the EU, the government will reduce the tariff from 22% to 10%.
At present lorries sold to the UK are not subject to a tariff, which the RHA says should continue in the event of a no-deal Brexit.
Peter Ward, chief executive of the UK Warehousing Association (UKWA), told SHD Logistics: “We await clarity from the Department of International Trade and The Treasury regarding the Temporary Tariffs Regime announced in March by the previous administration, which proposed in the event of a no deal Brexit zero tariffs on around 90% of UK imports, including imports from outside the EU. Whilst this could be a welcome tax break on imports, UKWA is concerned that another round of stockpiling could be triggered, particularly on higher tariff imports coming from Asia, such as apparel and homewares; and there may not be sufficient warehouse capacity available to accommodate such increases in inventories.”
Shane Brennan, chief executive of the Cold Store Federation, told us: “This change is a positive signal that Ministers have listened to our concerns about the counterproductive impact of price rises. That said a 10% increase is still damaging and will make it harder for businesses to replace old fleet with newer more efficient vehicles. Our industry is looking to both sides to stop the posturing and get a deal done.”
Transport expert Kirsten Tisdale, founder of Aricia, concludes:
” With 15% of haulage companies already unprofitable, and the others managing an average of only just over 3% pre-tax profit, the result of a 22% tariff would be to more than wipe out that low margin. A 10% tariff could result in another 30% or so becoming unprofitable, and 22% could leave less than 30% of haulage companies with some sort of profit. I’d go so far as to say that 22% would be catastrophic, with liquidations and redundancies just at the point where the country needs its supply chain to work as smoothly as possible.
” Of course, the solution is to pass on the cost to the customer. Something that the current low margins indicate is not something that the industry has been traditionally good at. And that means that you and I, as consumers, will ultimately have to pick up those costs, including tariffs on many of the goods we are purchasing also. And probably with exchange rate implications chucked into the mix. Hello inflation, big time.”