MD of independent logistics business Europa Worldwide Group, Andrew Baxter, puts forward a plan for offsetting any increased customs or transport costs post Brexit
Creating a duty-free zone for fuel within UK ports could offset the negative impact of the potential reintroduction of customs clearance for UK business.
The potential reintroduction of customs clearance after the UK leaves the EU will clearly increase the cost of transporting goods from the UK to Europe and vice versa. This makes our exports less competitive, which is bad for UK exporters and it makes our imports more expensive, which is bad for UK manufacturers and consumers.
Today all fuel used by UK driver accompanied vehicles transporting goods to or from the continent is purchased on the continent. Whether the trucks are British (12% of the market) or foreign they all fuel up on the continent.
They do this because fuel duties on the continent are much lower than in the UK. Currently, the average price of diesel per litre in the UK is the second most expensive in Europe, at €1.49 a litre, compared to, for example, €1.25 a litre in France.
Therefore, all commercial drivers who operate these routes are under strict instructions never to fuel up in the UK. Europa Worldwide Group operates about 100 international vehicles, and all fuel is purchased abroad.
From my trucks alone this puts about £2m into overseas’ (Belgium, France, Luxembourg, etc) tax incomes per annum. A rough calculation is that around £1bn per annum of fuel tax on fuel used for the transport of goods to or from the UK goes entirely into continental tax revenues.
My suggested solution is simple: create a duty-free zone for fuel within the ports for vehicles that are either coming into the UK or leaving the UK. This would cost the UK government plus minus nothing in fuel tax revenues, as these vehicles fuel up on the continent anyway.
The net impact of doing this would be that it would reduce the cost of the transportation of goods between the UK and Europe. In total, it would offset the increased costs due to the introduction of customs clearance, thus broadly protecting importers and exporters from any negative cost impact of Brexit.
The PM needs to be creative and confident, inventive and innovative, in order to demonstrate that Britain means business and can be a world centre for trade post Brexit.
Introducing duty-free fuel zones at ports would be good for British business with no cost to the exchequer – demonstrating that we are a progressive nation committed to boosting trade and broadening our reach across the globe.
Europa Worldwide Group employs more than 600 people across 12 sites in the UK and Hong Kong with a turnover last year of £117m.