Almost all industry spokespeople, workforce representatives and social interest groups were calling for urgent action to tackle the desperate measures that each were facing. It would not be uncharitable to state that pretty well every one of them were left disappointed by the 2023 Budget announcement.
The extended freeze on fuel duty and VED for HGVs were the only announcements with a direct effect on Trucking. But let’s not pretend that is anything more than “No change – yet”.
Here we have a roundup of comments from some organisations in our industry.
The RHA’s Director of Public Affairs & Policy, Declan Pang, said:
We are pleased the Chancellor has listened to the RHA and continued the fuel duty freeze and maintained the 5p per litre cut brought in 12 months ago. This is something we’ve campaigned for to help reduce costs and control inflation.
The continued freeze on Vehicle Excise Duty (VED) for HGVs for 2023-24 is welcome news and another much needed win for RHA members following our engagement with government.
However, today’s Budget could have gone much further to support hauliers, coach operators and the logistics industry.
We are disappointed to see the increase in corporation tax from 1 April as well as the return of the HGV levy from August this year. This is a tax targeted at the road freight industry that economic growth in the UK relies upon.
We are also concerned that the focus of the HGV levy has been shifted towards CO2 emissions. The original intention of the levy was to ensure overseas operators contributed to the upkeep of the UK road infrastructure. If this is no longer the main purpose of the levy, we question its utility at all, given the progress the industry has already made in reducing carbon emissions. The lowering amounts of levy funds recouped as fleets modernise will also need to be addressed.
The first-year capital allowance for investment in plant and machinery is welcome and we support the measures on encouraging the over 50s back to work through additional skills bootcamps and Returnerships. As the average age of an HGV driver is 52, we already know the benefits they bring to the workforce. We would have liked to have seen more Government efforts into recruiting younger people behind the wheels of trucks and coaches.
Almost everything we use and consume comes on the back of a lorry. This country’s growth depends on an effective logistics network.
We will continue to work with the Government on measures which will benefit our industry and the wider economy at this difficult time.
Paul Hollick, chair, Association of Fleet Professionals said:
For fleets, this was a Budget more noteworthy for what it didn’t include rather than what it did. We’d have liked to have seen measures announced ranging from the creation of an EV charging regulator through to national co-ordination on Clean Air Zones, as outlined in our recent tax and regulation manifesto. However, there was little content that showed the Government has been thinking about business road transport.
“The one bright point for fleets was the freeze in fuel duty. An increase in 11 pence per litre would’ve been extremely unwelcome at a point in time when the economy is struggling and removing that possibility is very much welcome. Further positives are difficult to identify but a recognition that more people need to be encouraged back into the workforce, through pension changes and childcare measures, could potentially help to a degree in a fleet sector where recruitment remains an issue.
Peter Golding, managing director of FleetCheck said:
There’s little of note for fleets in the Budget except for the freeze in fuel duty. While welcome, petrol and diesel prices have been falling in recent months anyway, so this will perhaps largely go unnoticed.
Also, the policies designed to get people back to work are potentially interesting, especially given shortages of drivers and other key roles in fleet, but whether these will have a noticeable effect in our sector is very much open to question.
What is perhaps most disappointing is that no support was announced for the electrification of the UK motor industry. Industry bodies have been calling for this and it really does feel as though the government is letting our car and van manufacturing capacity drift away to other countries that are being more proactive.
Barney Goffer, UK Product Manager at Teletrac Navman UK
The Chancellor’s Spring Budget held some interesting and welcome elements for fleet operators and construction businesses.
As predicted, the 5p fuel tax cut that was announced as a 12-month measure was upheld and there was also a continued freeze on the increase in fuel duty. And with the announcement that the OBR is predicting inflation will fall from 10.7% to 2.9% by the end of 2023, the pain of pump prices should continue to reduce. For the general public this is a saving of £100 a year on average, so the savings for fleets and equipment operators should be comparable.
Corporation tax rise is indeed rising, from 19% to 25% but with a tiered approach the Chancellor has suggested that only 10% of UK businesses will be paying the full 25%. This is because the Chancellor was adamant this was a budget for growth and investment is key to that.
While the Super-Deduction tax relief is indeed going, the Chancellor is introducing a new policy of full capital expensing for the next three years, meaning every pound invested in tech, plants, or machinery is fully deductible from taxable profits.
While ‘plant and machinery’ needs more definition – for instance, are mobile assets considered machinery – this is an extremely important point for fleets looking to expand, replace fleet, switch from ICE to EV, or digitally transform operations.
While we await the finer details, the initial signs in the Chancellor’s speech are potentially positive for the UK’s transport and construction sectors.”
David Bushnell, Director of Consultancy and Strategy, Fleet Operations
The Treasury is contending with considerable economic challenges. Pressure to keep a tight grip on the UK fiscal environment combines with a need to help consumers and businesses navigate the cost-of-living squeeze. Add government sustainability targets into the mix and the Chancellor faced a tough balancing act with his Spring Budget.
For fleets, the decision to freeze fuel duty and retain the 5p reduction for a further year comes as welcome news for operators struggling with a burgeoning cost crisis. Pump prices may have fallen back from their 2022 summer peak, but they remain markedly higher than in recent years. Margins, consequently, continue to be hit hard.
The move, however, will not be well received by those looking to accelerate transport electrification. Environmentalists will be buoyed by a pledge of up to £20 billion to support carbon capture, but the lack of any significant new measures to further incentivise electric vehicle (EV) adoption and infrastructure roll out signals a missed opportunity.
EV adoption remains in its infancy and with high energy costs continuing to impact drivers reliant on public charging networks, more must be done to achieve a timely transition to net zero transport. Cutting the public charging VAT rate, to match the rate for domestic electricity, would have been a good place to start.”
Elsewhere, fleets buying vans and trucks will benefit from a new policy of ‘full expensing’ but the importance of leasing as an integral ingredient to cost-efficient fleet operations remains unrecognised. It is disappointing that the industry’s call for a super deduction to cover leased assets has been ignored.”
Logistics UK’s Chief Executive, David Wells, comments:
Logistics is the UK’s system for growth and today’s budget announcement was an opportunity for the Chancellor to ensure continued – and potentially increased – investment in green growth and fulfilling careers, while keeping prices down in the shops.
Today’s announcement that the 5ppl cut in fuel duty is to be retained for a further 12 months is very welcome news for logistics businesses, particularly SMEs – who make up 99% of the industry, and traditionally operate on low margins. Logistics UK has consistently urged government to extend this cut, while maintaining revenue levels through VAT and other sources. Logistics is at the heart of every sector of the economy; this decision recognises the importance of managing logistics costs to avoid further inflationary pressures on business and consumers. This should help to ensure businesses have the funds to invest in productivity, growth and greener technologies, alongside the new policy for full capital expenditure announced as the successor to the super-deduction (providing it encourages the transition to a zero-carbon economy).
However, Logistics UK is dismayed by the lack of support to help businesses with energy costs and our sector’s transition to a low carbon economy, something which the government has urged industry to commit to. This is a missed opportunity. Our members will also be concerned about proposals for a reformed HGV road user levy and together we will be seeking urgent clarification as to the detail involved.
While we are also disappointed there was no reference to much-needed Apprenticeship Levy reform, it is encouraging that government is focused on supporting people into work, which will help to relieve the existing skills gaps in industry and the wider UK economy. Logistics UK will work with its members to scrutinise the detail and identify what these measures will entail, such as the announcement of skills bootcamps and Returnerships, and whether these will provide a credible pathway into logistics.
