Trade groups react to pre-election budget

The budget package unveiled by the chancellor George Osborne on 18 March has been met with a mixed response by the road transport industry.

Among the measures announced that will impact specifically on the sector were a widely expected cancellation of a fuel duty increase of 0.54 pence per litre scheduled for this September, in line with the coalition government’s policy in previous years.

According to the HM Treasury budget document, the government will have “eased the burden on motorists by £22.4 billion by the end of 2015-16” as a result of its policies on fuel duty, which it says: “equates to a saving of £675 for a typical motorist, £1,400 for a small business with a van, and £21,000 for a haulier.”

It added: “By the end of 2015-16, fuel duty will have been frozen for five years, the longest freeze for more than two decades.”

The Treasury also announced a one-year freeze on both the vehicle excise duty (VED) rates for HGVs, and the HGV road user levy rates, from 1 April.

While not announcing any specific sums towards grants or funding that would help ease the driver shortage crisis, as has been  campaigned for by trade associations, the government has promised to: “review the speed with which heavy goods vehicles (HGV) driving tests and driver medical assessments currently take place, and will consider options to accelerate both in order to help address the shortage of qualified HGV drivers.

“The government will also work with road haulage firms on an industry-led solution to the driver shortage, including looking at the right level of access to, and funding support for, training.”

Mr Osborne also promised reduced tolls at the Severn crossings from 2018.

“The Severn crossings are a vital link for Wales. I can tell the House we will reduce the toll rates from 2018, and abolish the higher band for small vans and [small] buses.

“It is a boost for the drivers of white vans. Let me reassure the deputy leader of the Labour party that it will apply to pink vans, too,” he added, in a dig at Harriet Harman and her general election battle van, deployed as part of a campaign to attract female voters.

As the final budget before the UK goes to the polls on 7 May, the extent to which the measures announced can be enacted will depend on the composition and decisions of the newly elected government. But the shadow chancellor, Ed Balls, suggested on BBC Radio 4’s Today programme on 19 March that nothing in Mr Osborne’s “quite empty” budget would be reversed by Labour should it win the election.

Responding to the budget, the Road Haulage Association (RHA) expressed regret that Mr Osborne had failed to commit to targeted funding for hauliers, despite intensive lobbying, and said the industry remained ‘in crisis’.

It added that the decision to reject its call for support was: “a poor one for the economy, for tax receipts and for the industry” – but noted the com-mitments made to look at the issue, adding that it looked forward to further discussions.

“We have put forward a strong, clear argument for why funding is necessary and appropriate,” said RHA chief executive Richard Burnett.

“Our lobby for funding support will be even stronger in the coming weeks.

“I would like to thank the many RHA members and other organisations who have supported our lobby and continue to do so. Meanwhile, the RHA is committed to pressing ahead with its programme of advising members, promoting the industry and working to improve drivers’ conditions.”

Burnett also noted the continued freeze on fuel duty, but said that, had the chancellor: “reduced duty (as he did with alcohol), he would have boosted growth and employment as demonstrated through the independent, RHA-funded, NIESR research.”

He added that the continued VED freeze for HGVs was: “an appropriate recognition of the vital role trucks play throughout the economy.”

Meanwhile, the Freight Transport Association (FTA) was upbeat in its response to the commitments surrounding the HGV driver shortfall, noting that Mr Osborne had “accepted the government’s role” in the problem by announcing the review of driving tests and medical assessments. FTA added that it was: “pleased that the government had listened to industry.”

James Hookham, FTA managing director of policy and communications, said: “FTA members will be pleased and impressed that two issues raised at our driver crisis summit (see page 1) have been so swiftly addressed.

“Speeding up driving test bookings for truck drivers and medical assessments will help us get qualified drivers on the road quicker and more reliably, helping industry address its shortfall of 60,000 drivers. We look forward to seeing this implemented as soon as possible.”

He continued: “Logistics is suffering a huge shortfall of drivers which, if not addressed, will act as drag on the economic growth the chancellor wants to see. FTA welcomes the moves to speed up the processes associated with getting HGV drivers on the road as excellent news.

“But solving this in the longer term means attracting more young people to the industry. The cost of acquiring the necessary licence (£3,000) acts as a major barrier to many young people, and we are pleased that George Osborne will work with industry to ensure funding can be provided to overcome this problem.”

FTA also welcomed the fuel duty freeze, albeit expressing disappointment that Mr Osborne had not taken the opportunity to enact a three pence per litre cut in the levy.

But the association was more vocal in its criticism of policy surrounding the Severn crossings – calling the continuation of the tolls ‘a kick in the teeth’ for businesses in Wales and south west England, and a ‘bitter blow’ for the freight and logistics industry.

FTA said it was disappointed that the government had: “disregarded Category 3 tolls (lorries, large buses and coaches)” and done “nothing to address the punitive level of the toll.”

Ian Gallagher, FTA head of policy, south west and Wales, said: “The chancellor’s announcement… is the first confirmation from UK government that charging will continue after 2018 when the bridge comes into public ownership.

“Whilst the change to the tolls is seen good news for van and minibus operators, FTA considers it is a kick in the teeth for the logistics industry as a whole. There are three years of toll increases still to come.  By 2018 we anticipate that the toll will be in excess of £20 for HGVs.”

He added: “For too long freight operators have had to pay high charges to use the Severn Crossings, which are a vital artery between Wales and England. The money that business spend on paying these tolls could be better invested on driver training or on greener fleets.”