Transport industry responds to 2016 Budget
Following earlier suggestions that fuel duty was likely to rise as part of the Chancellor of the Exchequer’s Budget announcement last month, trade groups welcomed George Osborne’s decision to in fact freeze the levy for another 12 months – with the Road Haulage Association (RHA) calling it “welcome news to the thousands of hauliers who are already paying the highest levels of fuel duty in Europe.”
“A tax on diesel is a tax on the entire economy – the vast majority of which is carried on the back of a truck,” the RHA’s chief executive, Richard Burnett, said.
“It has been widely publicised that the economy is slowing down yet the one area that remains buoyant is the retail sector. The Chancellor’s decision to freeze duty will keep money in people’s pockets – money that will help retailers and provide a sound base for economic recovery.”
The Freight Transport Association (FTA) also welcomed the fuel duty freeze, but said the chancellor had missed an opportunity to boost the economy by failing to announce the three pence per litre reduction in the levy advocated by FTA in its pre-Budget submission.
“Industry currently pays around £7 billion annually in duty and an increase of just one penny would add £470 a year to the cost of running a 44-tonne truck, which would have a huge impact on transport operators,” said the organisation.
The Budget additionally confirmed that the rates of vehicle excise duty (VED) and the road user levy had both been frozen for HGVs for 2016-17.
Meanwhile, FTA also offered praise for Mr Osborne’s plans to halve tolls on the River Severn Crossings when the bridges revert to public ownership in 2018, subject to consultation.
Ian Gallagher, FTA head of policy for Wales and the south-west, said: “Reducing the tolls will be a welcome shot in the arm for businesses and commuters who use the bridges daily, allowing businesses to invest in the things that matter such as new vehicles and staff recruitment.”
Kevin Richardson FCILT, chief executive of the Chartered Institute of Logistics & Transport (CILT), welcomed the government’s commitment to investing in large-scale infrastructure projects which he said would: “ensure that the logistics and transport industry can continue to drive UK economic growth and serve the fast-growing population.”
The Budget document claims that capital investment in the transport network will have increased by over 50 per cent over this Parliament compared with the last.
Planned road improvements mentioned by Mr Osborne in his speech included new money to create a four-lane M62, and a pledge to “develop the case” for a new tunneled road between Sheffield and Manchester. In a bid to improve Pennine road provision, upgrades to the A66 and A69 were also announced.
Mike Danby, CEO of logistics provider Advanced Supply Chain, said: “Congestion is crippling the industry and the economy, and ensuring we maintain and improve the current road network, as well as build new roads to increase overall capacity should be absolute imperatives for the government.
“The infrastructure announcements in the Budget are a small step towards the so-called ‘Northern Powerhouse’, but road networks across the country need attention.”
He added that: “the Treasury’s revenues could be directed to driver training, in the form of grants. This would help businesses tackle the substantial driver shortages the haulage industry is struggling to cope with.”
Mike Hawes, chief executive of the Society of Motor Manufacturers & Traders, praised “some positive measures” in the Budget, including support for energy efficient technologies. But he expressed disappointment that the chancellor “has not done more on business rate reform” – specifically, failing to remove plant and machinery from business rates valuation.
