Logistics UK has called on the government to maintain the current rate of fuel duty, reform business rates and cut electricity costs for logistics operators as part of its recommendations ahead of the Autumn Budget.
The trade body has submitted its proposals to the government ahead of Chancellor John Healey’s Budget on 28 October, arguing that measures are needed to ease sustained cost pressures and encourage investment across the sector.
The organisation is calling for the current fuel duty rate, including the existing 5p cut, to be maintained. It said fuel accounts for roughly a third of HGV fleet running costs and warned that an increase would affect operators’ costs and investment decisions, as well as potentially adding to consumer price inflation.
Chief executive Ben Fletcher said: “As a sector, we employ 2.6 million people across the economy and enable more than £1 trillion of trade every year, and that means our members are uniquely positioned to unlock regional growth, address the NEETs crisis and drive the government’s reindustrialisation agenda.”
“Our sector is starting to drive the green shoots of economic recovery,” Fletcher said. “But there is still much to be done. We are urging the Chancellor to create a cost-competitive business environment that will nurture the improvements in business confidence that we are beginning to see.
“Key to this is maintaining the current rate of fuel duty, including the 5p cut. Fuel accounts for roughly one-third of a HGV fleet’s running costs, so any increases in fuel duty can significantly affect business viability, investment decisions and the cost of living.”
Logistics UK also wants business rates reformed to encourage investment in warehouses, freight infrastructure and supply chain productivity.
The organisation said the industrial sector, of which logistics forms a significant proportion, paid more than £7.5bn in business rates across England and Wales in 2023, before April’s increases affecting warehouses.
Fletcher said: “Warehouses, distribution hubs and freight terminals are critical national assets but, the current property tax regime can act as a disincentive to investment.”
The trade body is also calling for logistics to be included in the British Industrial Competitiveness Scheme (BICS), which it said would reduce electricity costs for businesses as operators increasingly switch to battery-electric vehicles.
“As operators continue the switch to cleaner battery vehicles, the logistics sector will become an electricity-intensive sector in the coming years, and the sector needs to be included within the British Industrial Competitiveness Scheme,” Fletcher said.
Logistics UK also pointed to continuing volatility caused by the conflict in the Middle East, including higher fuel prices and disruption to shipping.
Fletcher said: “This is why it is not the time to increase fuel duty, and any increase is likely to have a double inflationary knock-on effect for consumers, as prices rise in the shops as well as at the pumps.”
The trade body said its proposals were intended to support investment and maintain the competitiveness of the logistics sector as it faces rising operating costs and the transition to lower-carbon vehicles.
