Supply Chain Levy

The road haulage sector should be given a two-year deadline to improve conditions for lorry drivers and recruit more workers or face a new tax, ministers have been told.


A cross-party group of MPs has called for the logistics industry to “get its house in order”, including better overnight facilities for drivers and new training routes to recruit more hauliers, as the sector faces labour shortages.


But the Commons Transport Select Committee said that if the changes are not made within two years, then the most profitable parts of the sector should face a new tax.

 

Reality Check!

TLDR: Major users of road haulage services may be subject to new taxation


Under the proposed Supply Chain Levy, large supermarkets, oil companies and online service giants could be forced to pay towards the cost of new facilities for heavy goods vehicle (HGV) drivers.

Huw Merriman, the Conservative chairman of the committee, said: “We urge Government to be brave and force the sector to get its house in order. A Supply Chain Levy has worked previously to incentivise reform.


“If the industry won’t deliver change, Government should do so and send them the bill via increased taxes to those who produce and sell and make the most profits.”

Over the last year, a lack of HGV drivers has created a bottleneck in the supply chain, leading to fuel shortages at petrol pumps and empty shelves in major supermarkets.


The committee’s report, Road Freight Supply Chain, says “a key reason drivers do not stay in the sector is the lack of high-quality rest facilities”.


It is calling for minimum standards of facilities, including security, clean showers and toilets, healthy food options, and services for female drivers.


The committee has called for haulage companies to pay for the special training needed to drive a HGV, currently covered by drivers themselves.


It said this could also be funded through the levy if the industry does not step up.

 

Industry response

TLDR: Both Logistics UK and the RHA say blame, in part, lies with parties outside of the industry itself including central government and local authorities.


The chief executive of Logistics UK, said blame for problems in the sector has been unfairly placed at the industry’s door. David Wells said:


“To place all the blame for the supply chain issues facing our industry at our door does our workers a great disservice, and totally ignores the role which the Government and other agencies have played in creating staff recruitment and retention problems across the sector.”

He said many HGV drivers being unable to access suitable safe and secure truck stops across the country is “a national disgrace”, citing the problem as being down to “local authority planning rules and red tape that prevent these facilities being built in the first place”.


He said the logistics sector is facing issues “caused by a combination of factors, none of which are within its control” including an ageing workforce, the loss of European workers after Brexit and the impact of the pandemic.


He added: “It’s disappointing that the committee has taken so long to reach the wrong conclusions and not address the real public policy issues needing urgent attention.”



The Road Haulage Association said it broadly welcomed the report, but added that it is unreasonable for the logistics sector to fund things like driver training alone, due to the “significant upfront cost, the acute shortage of drivers and the difficulties in retaining new drivers due to external factors”.


Managing director Richard Smith said: “We welcome the recognition of the difficulties of life as an HGV driver. In many places HGVs and their drivers are simply not welcome.


A Department for Transport spokeswoman said: “We recognise the global challenges this critical sector faces and have taken an unprecedented 33 measures so far to address the HGV driver shortage.


“This includes making 11,000 training places available through our skills bootcamps so more people can launch careers as HGV drivers, boosting the number of HGV driver tests and investing in improvements to lorry parking and driver welfare facilities.


“Tackling global supply chain constraints remains a top priority for Government and we’ll continue to support the road freight sector through our interventions.”


Government Transport Committee Report