Financial standing rates should be set in sterling not euros after Brexit, says

Financial standing rates should be set in sterling not euros after Brexit, says FTA

Financial standing rates, which ensure operator licence holders have sufficient funds to operate, should be set in sterling not euros after Brexit, says the Freight Transport Association (FTA).
 
For standard operating licence holders, financial standing rates are currently set in European Law at €9,000 for the first vehicle and €5,000 for each subsequent vehicle. For non-Eurozone member states, including the UK, the exchange rate is set on the first working day of October and applied for the following calendar year from January 1. 
 
The Office of the Traffic Commissioner is set to announce the official rates for financial standing in 2018 in the coming weeks. A sharp rise in the strength of the pound in September has spared the freight and logistics industry a further hike in January 2018 as the exchange rate is now almost the same as it was last year, so no significant change is expected this year.
 
The FTA believes the UK should be setting its own rate - or completely review the financial standing system against which logistics operators are deemed to be operationally viable - after Brexit on March 29 2019.
 
James Firth, FTA's Head of Licensing Policy, says it would be absurd if the domestic UK road transport industry continued to be pegged to a financial standing rate euros after Brexit. 
 
“The UK needs to consult with industry or select a level at which business is to be judged, to ensure that operators are able to plan efficiently and manage cash flows accordingly. 
 
“Between 2012 and 2016, the actual figure required has fluctuated by almost £2,000 for the first vehicle, simply based on the changes in the exchange rate for euros – this situation needs urgent attention to ensure that stability for business expenditure can be established moving forwards.”  
 
In addition, Firth says requirements for others in the sector remain at differing levels: “At this point, the rate for restricted operators, set by the UK Government, not Brussels, has remained much lower than for traditional hauliers, while those operating in Eurozone countries have enjoyed a steady rate (Euros €9,000 and Euros €5,000) even through the depths of the Eurozone debt crisis.
 
Firth continues: "Shouldn't the Government be taking this opportunity to reassess what financial standing is for, how it is determined in the 21st century and base it on values fixed in Sterling? What are the greater financial risks to the hire and reward sector that the government perceives justify continued rates so substantially elevated above those in the own account sector - which, of course, takes in almost every type of industry and sector across the UK economy? The freight and logistics sector deserves a consistent operating environment in a post Brexit world.”