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07 Aug, 2019|

Hauliers – on the wrong side of the road – facing a no deal Brexit

It’s with continuing bewilderment that almost every day Anthony Jones have to get to grips with issues that the insurance industry is facing with the potential for a no-deal Brexit. There are, however, our haulier customers who are facing an equally complex environment. A no-deal Brexit has many observers predicting capacity issues at ports unless there is a substantial change to customs formalities. Transport businesses are still unsure about how borders are expected to operate and their role and responsibilities in making it work. The sector is facing complex safety and security responsibilities, staff and skill shortages to process customs and driver safety and welfare with traffic management at ports.

It appears to us that there is frequently an olive branch of help and support only for the devil appearing in the detail. The latest of this being a Department of Transport consultation that proposes Highways England Traffic Officers (TOs) given the power to demand and check drivers’ documentation for the first time.

Ostensibly, this consultation is to try to stop congestion at Dover caused by customs checks. Sensible perhaps given that hauliers will need extra permissions to leave the UK. We do not know as yet what these will be. There it is – at the root of the issue is that the sector does still not know what the rules will be. Current arrangements of standard international operators licences and a community licence for journeys to, from or through the EU and EEA will mean that if the UK leaves the EU without a deal on 31 October 2019 there will be a need for extra permits to transport goods in EU countries after 1 January 2020.

We have written about the Haulage sector previously and the impact of Brexit.

Where there is possible chaos and confusion, what better than to give Traffic Officers the ability to search vehicles, check documentation AND, whilst at it, increase fines and penalties to a pressured haulage sector? Bear in mind that these people are road safety specialists you might think that more than the odd TO will be wondering if they have the skills to change their roles in what potentially could be stressful and confusing situations.

Add to this latest development such things as the issues we’ve listed below and you can see growing pressures on the practical steps needed to be taken by hauliers and ever increasing cost pressures:

If we look at the cost pressures from an insurance point of view on the haulage sector there are a few that we would bring to the fore.

Insurance Premium Tax (IPT) – Government income from insurance premium tax hit a record high of £6.3bn in 2018/19. UHY Hacker Young found that IPT receipts have more than doubled in the last five years since £3bn was collected in 2013/14. In June 2017, the government increased the IPT rate from 10% to 12%. This is a “stealth tax” on hauliers buying products that they are either legally required to have or that most feel are essential. The impact particularly on smaller owner operators is severe and unfair.

Read our earlier article about Insurance Premium Tax being frozen.

Ogden – Government changes to catastrophic personal injury calculations – the discount rate has led to the Association of British Insurers (ABI) will further add to insurers’ costs, and put more pressure on premiums, especially for higher risks – that’s the haulage industry.

Read our article about why the Ogden rate is so important.

Vehicle Repair Costs – costs are also rising, reflecting a more sophisticated vehicle design and technology, which in most cases costs more to repair when damaged. ABI have just reported that the repair bill for insurers in the first quarter of this year was £1.2bn, the highest quarterly figure since the ABI started collecting this data in 2013. In the first three months of this year, the cost of theft payouts increased by 22% to £108m on the same period last year. The rise reflects Home Office figures recording a 50% increase in vehicle thefts over the last five years.