The Autumn Budget offered a mixed picture for businesses in our industry. There were some positive developments, and some unwelcome developments.
Firms throughout the road transport sector were also delighted with the decision to continue with the freeze on fuel duty. We at the RHA have long been clear that raising fuel duty would have been catastrophic for operators. It would have been bad for the economy too. So, we’re pleased the Chancellor listened to our concerns on this.
The Chancel¬lor’s commitment to increase the Employment Allowance for small businesses from £5,000 to £10,500 is also welcome but we do note this will only apply to the smallest companies, so many firms in our industry will not be eligible.
The increase to employer National Insurance contributions has left many business owners with much to think about - as they come to terms with the realities of the additional costs they’ll have to factor in.
With operating costs increasing and margins tightening, raising employer National Insurance contributions (NIC) to 15%, and the lowering of the threshold, will be a challenge for companies in an industry where 95% are small and medium sized and who could well do without this additional expense.
These changes will make things more difficult for many businesses of all shapes and sizes, be that operators of HGVs, LCVs or coaches.
This increase in employers’ costs in particular may force some businesses to re-think their recruiting strategies entirely. The National Insurance changes, on top of other cost implications from the planned employment law reforms, are increasing cost pressures on firms at a time when our sector is already dealing with rising expenses. This will ultimately impact the ability for some to hire new staff and expand.
Our sector is not alone in being impacted. Since the Budget announcement, the government has faced challenges from businesses in the hospitality, construction, manufacturing and healthcare sectors. The overwhelming reaction has been clear that businesses will find it much more challenging to invest and recruit in the short term. Indeed, the Confederation of British Industry warned that the NIC changes will “increase the burden on business and hit their ability to invest”.
We’ve been clear about the difficulty businesses will be confronted with in balancing tax and regulatory changes on a number of fronts all at once – and the potential impact this will have on jobs and prices.
We’ve also been consistent that the government’s vision for growth won’t be realised without supporting our vital sector – a sector that contributes billions to the economy, is key to daily life and is crucial to Britain’s economic future.
Planning reforms, meaningful investment in infrastructure and clarity and certainty to invest are all key for Britain’s business owners to believe that decision-makers have their back in the short as well as the longer term.
As critical economic enablers, we as an industry must be on the front foot to future-proof the supply chains. We therefore want the policymak¬ers to work alongside us to minimise the financial burden and the regulations placed on businesses.
As our members await the spending review and infrastructure strategy to better understand government plans, we’ll continue to engage with MPs, Ministers and stakeholders across the country on their behalf. Partnership and collaboration between industry and government is key.
Ultimately, the true test of this budget will be whether firms can invest, grow and boost the economy over the next 12 months. We stand ready to help to achieve this.
Richard Smith, MD, RHA
