How Will the Budget Affect the Logistics Industry: Part 2

We’ve already covered what the budget means for transport in part one of our budget recap, but now it’s time to see how the industry is reacting. A mixed picture is emerging, with spokespeople welcoming measures in some areas and lamenting lack of ambition in others.

Read on to get a little more perspective on how this new budget will impact the way you plan and complete haulage jobs.

Tax and Duty

While the decision to continue the freeze on fuel duty for a ninth consecutive year has been welcomed, the budget has come under criticism for failing to reduce costs at the pump.

Howard Cox, founder of pressure group FairFuelUK, was especially candid. ‘This government’, he said, ‘does not get it when it comes to our motoring nation’. He decried the lack of a ‘necessary cut in duty to stimulate the economy’ and the government’s ‘utter silence on those greedy unchecked oil companies continuing to fleece hard-pressed motorists’.

In addition to these themes of unfairness and conflict, Cox also commented on what he saw as the impracticality of the government’s policy, noting the lack of ‘incentives to move on practical low emissions solutions’. Anyone dismayed at the lack of active support for haulage jobs will empathise with his points.

While the decision not to lower fuel duty has widely come in for criticism, some have been receptive to other tax changes. Head of UK Policy at the Freight Transport Association (FTA), Christopher Snelling, signalled satisfaction with the freeze on excise duty for heavy goods vehicles and the decision to ‘maintain the difference between alternative and main road fuel duty rates until 2032.’

Similarly, Gerry Keaney, chief executive at the British Vehicle Rental and Leasing Association (BVRLA), called the decision to postpone the introduction of a carbon dioxide-based van duty ‘great news for fleets.’

Each of these comments also reflects a sense that this budget balances business and environmental concerns well. Keaney said that the Te BVRLA is pleased that the government has decided to take a ‘pragmatic, business-friendly approach to greening the van fleet.’

Road Improvements

Others praised changes in how vehicle excise duty (VED) is spent. Steve Norris, chairman of the advisory board at Highways UK, called the decision to spend all VED on roads ‘a great boost for the country’s economy.’ Framing his comments in terms familiar to anyone working haulage jobs, he stated that the importance of efficient road infrastructure to prosperity has long been understood but seldom honoured in the past.   

Road Haulage Association (RHA) chief executive Richard Burnett was more circumspect, stressing the importance of improving our road network now, and noting that ‘congestion resulting from road improvements costs the haulage industry millions of pounds each year.’

Snelling also raised similar concerns, questioning whether the chancellor had allocated enough funds to fix the problem. The £420 million announced was, he said, ‘a drop in the ocean’, citing estimated costs of £8 billion to repair potholes.

Alternative Fuels and the Environment

As indicated above, on the whole, industry figures have welcomed the budget’s pragmatic approach to environmental concerns. Charlotte Morton, chief executive of the Anaerobic Digestion and Bioresources Association (ADBA), praised the difference maintained between alternative and main fuel rates, which she called necessary in order to support the decarbonisation of the UK transport sector.

Scott Mac Meekin, however, CEO at Dearman, spoke of his disappointment in the government for not ‘scaling back red diesel’. It is controversial among supporters of cleaner fuel for ‘artificially’ lowering the price of diesel to keep it competitive (Meekin’s word). Many working in haulage jobs, however, may welcome the continued availability of a cheaper alternative.

Brexit

Finally, many people have aired concerns about the possible impacts of Brexit. Baxter Freight’s Ian Baxter summed up concerns over a ‘no-deal’ scenario, saying: ‘What we have learned from the chancellor’s budget announcement is that he really isn’t planning on a no-deal Brexit, which would require a completely new budget announcement and economic forecast from the government.’ Worryingly, according to Baxter, allocated funds ‘would not even touch the sides of the problem.’

Still, before anyone working haulage jobsbegins to panic, Baxter also suggested that the lack of preparation for no deal was encouraging. That the Treasury seems not to think no-deal is worth preparing for was, he suggested, ‘the biggest thing to cheer of all’.

Reactions have thus been mixed. To the extent that a consensus emerges, extra funding and tax freezes are welcome, but perhaps insufficient to meet industry demands. Haulage companies would therefore be well advised to remain prudent – especially in the event of a no-deal surprise in March 2019.

Author Plate

Norman Dulwich is a Correspondent for Haulage Exchange, the leading online trade network for the road transport industry. Connecting logistics professionals across the UK and Europe through their website, Haulage Exchange provides services for matching haulage jobs with available drivers. Over 5,400 member companies are networked together through the Exchange to fill empty capacity, get new clients and form long-lasting business relationships.