Ministers have been warned the haulage industry could collapse “within a matter of weeks” without a sector-specific support package to mitigate against a downturn sparked by coronavirus.
Industry leaders have claimed current measures introduced by the UK Government “simply don’t work” and have left some firms so strapped for cash they have been unable to furlough workers, instead being forced to sack them outright.
The industry, which helps manage the flow of vital goods including food and medical supplies, supports thousands of jobs and hundreds of businesses throughout the UK.
Gavin Newlands, the SNP’s transport spokesman at Westminster, has written to transport secretary Grant Shapps and chancellor Rishi Sunak warning businesses will be forced to close if they cannot survive a drop in volume caused by the crisis.
“Cash flow is a key problem for the industry and as demand continues to slump that problem is not going to go away.”
Mr Newlands has been working closely with a number of leading haulage firms on recommendations to help protect job in the wake of the pandemic.
He is calling for urgent cash injections in the forms of grants rather than loans, a six-month exemption from vehicle excise duty and a scheme to allow haulage vehicles to claim back fuel tax duty to stop the industry going bust.
“The Road Haulage Association has a significant number of hauliers operating on razor-thin margins, and the current emergency has left many fearing for the survival of their business,” Mr Newlands said.
“Cash flow is a key problem for the industry and as demand continues to slump that problem is not going to go away.
“We cannot have a situation where a critical component of national infrastructure disappears in a matter of weeks in the middle of a pandemic – but that is the real danger facing the industry.”
Industry bosses fear financial support measures, such as the Coronavirus Retention Scheme, are too inflexible for haulage firms who are at “massive” risk from banks and fuel suppliers suddenly withdrawing credit.
Richard Burnett, chief executive of the Road Haulage Association, said: “The measures that the government have come up with simply don’t work – firms need an immediate cash injection.
“An average haulier will only make two percent margin and they’ll have two or three weeks’ cashflow within their business. Some hauliers can’t even furlough their staff because they don’t have the money to pay them.”
Mr Newlands and his parliamentary colleague Chris Law, who is MP for Dundee West, have met a number of local hauliers in recent weeks.
Mr Law said businesses in his constituency have “serious concerns over the future of this vital industry, which supports thousands of jobs across the country”.
He said: “I know that there are many constituents who either work or have family who work in the road haulage industry and are very concerned about the future of the industry once Covid-19 restrictions are lifted.
“Many of these hauliers are currently playing a vital role in delivering food and medical goods across the country.
“It is vital that support is tailored for different industries where required, and by working with industry bodies such as the Road Haulage Association, I hope that the UK Government can find solutions which will give this industry the support it needs.”
The Department for Transport and HM Treasury was approached for comment.