The government has defended accusations from leading hauliers that sweeping tax increases targeting businesses in last October’s budget will cripple growth and see yet more transport and logistics companies collapse into administration.
Speaking to MT at an RHA parliamentary reception this week, Rachel Taylor MP, chair of the APPG on Freight and Logistics, rejected claims from attendees that changes to National Insurance contributions and a rise in the minimum wage would seriously undermine planned road and driver welfare investment and that rising costs and shrinking volumes would make 2025 the worst year for hauliers since the Covid outbreak in 2020.
“They need to look at the rest of the agenda that we have and that we’re investing in growth and skills,” Taylor insisted. “There’ll be more work for them to do and more opportunities. Things are happening and that’s going to impact their businesses far more than the changes that we’re having to make with tax. We’ve inherited a dreadful economic situation and we have to make sure that we’re recovering from that in a way that can help growth across the whole of the country.”
Taylor’s comments come in the same week as APN chairman Paul Sanders said the autumn budget had “introduced a few items of great concern, not least the changes to employer’s National Insurance contributions and the threshold at which they are payable”.
Taken across all logistics workers, this adds £1.7bn to the cost of operations, he explained, adding that it was “hard to see how these extra costs will be managed except to reduce or freeze staffing numbers, just at a point where hauliers should be taking on and training apprentices and new talent”.
Responding, Taylor said: “The freight companies that I’ve been to see in my constituency are good employers. They care about their staff. They want them to have rights from day one. They’re the kind of employees who give them gym facilities and free food. They care about what happens to them and their families. So I think our agenda about being better employers hits home really well for them.
“The difficulty is that they’ve had 14 years of a Tory government that hasn’t invested in the sector and we’re having to rebuild from that so there are going to be difficult times. Over the last 14 years we’ve seen so many small hauliers go out of business. We’ve seen a number of liquidations and we need to look at why that’s happening and what we can do as a government to help that.”
More than 200 guests attended the Westminster reception where operators were joined by parliamentarians including former roads minister Bill Esterson MP, energy security and net zero committee chair (pictured on stage above). Other attendees included trade associations and key stakeholders as the RHA launched its its vision for roads investment which it says will help the government deliver on its mission to grow the economy.
Taylor also announced plans to do more to tackle freight crime, which she agreed had now reached epidemic proportions.
However, speeches from both Taylor and roads minister Lilian Greenwood failed to address mounting concerns over looming deadlines imposed on hauliers to make the potentially costly transition to zero emission fleets.
“I’ve spoken to smaller hauliers and they’re saying they’re not getting as much help with this as some of the larger companies and we need to look at how we’re helping them to buy in to that green agenda,” Taylor told MT.
“I think we need to tie up with public transport in local areas, and particularly where we’ve got combined authorities where they’re running electric buses. Those buses are out all day, those facilities need to be used to charge up trucks while the buses are out. There needs to be a lot more joined up thinking.”
Taylor went on to confirm that hydrogen was a major part of the government’s decarbonisation plans: “We need to look at that hydrogen agenda,” she said, “because that’s going to be powering our larger vehicles in years to come and we need to put investment in there and hopefully the sector will buy into that as well.
“It’s already happening on the outskirts of my constituency. You’ve got Horiba Mira looking into that, you’ve got a lot of the energy producers looking into it and it makes sense that it’s another fuel we need to look into rather than just saying we’re putting all our eggs into the electric basket.”