Budget 2017

The transport industry has given a mixed reaction to today's (3 March) Spring Budget.

Logistics UK welcomed chancellor Rishi Sunak's moves to support the recovery of the economy, including a freeze in fuel duty and extension to the furlough scheme, but said the industry needed to see greater investment in training programmes to help fill growing job vacancies.

Meanwhile, e-commerce specialist Parcelhero warned the Budget would "fail to rescue retail or bail out business".

Alex Veitch, general manager of public policy at Logistics UK, said: “Funding to train new entrants to the logistics sector is particularly welcome at a time when the industry is suffering significant skills gaps and the loss of EU workers, and a more flexible approach to apprenticeships will also assist the sector in recruiting the next generation of logistics employees.

“However, the industry needs new recruits now, and a more flexible method of providing direct support to those looking to retrain and reskill into vital operational roles like HGV drivers and transport managers would help that transition.  The average cost for a 12-month apprenticeship training and license acquisition is £7,000 – Logistics UK would like to see more immediate government support, in the form of interest-free loans or grants, to be made available now.”

Responding to the announcement of a rise in corporation tax in 2023, and the extension of the business rates holiday until June 2021 before a discounted rate is introduced, Veitch added: “Many logistics businesses are still to recover fully from the impact of COVID-19, with a large proportion of the industry still in limbo as a result of the continued closure of sectors such as entertainment and hospitality.  It is vital that business is not penalised by additional taxation at this crucial time in the economic recovery.”

On news of an 'infrastructure bank' launch, Veitch said: “Today’s commitment to a multibillion-pound investment into infrastructure is welcome news for the logistics industry. Efficient and effective transport infrastructure is vital for logistics to be able to support the needs of UK businesses; the importance of a strong and resilient network to economic recovery must not be underestimated.

“Logistics UK also welcomes the government's commitment to a Freeport programme, with the confirmation of eight successful Freeport bids. We are confident these will support business and industry in these locations and urge the government considers expanding the programme.”

RHA chief executive Richard Burnett said: “This has been a Budget that is good for business and good for people. We consider it to be a Budget based on optimism and right now, that’s something that we all need."

However, Parcehero head of consumer reserach David Jinks said the chancellor's promised £65bn spend, at the expense of a new 25% corporation tax, was "simply robbing Peter to pay Paul" and will not be enough to save many SME retailers and manufacturers.

"The extension of the 'holiday' on business rates for retailers and other SME businesses until the end of June has been widely welcomed, though less generous discounted rates for the rest of the year are disappointing," he said. "The holiday also simply kicks into touch the real issue: Britain’s business rates are horrific."

Jinks also said the furlough extension is "just postponing the inevitable".

"Once the scheme ends, SME retailers and manufacturers will have to make the difficult choice about how many people they can retain while they fight to get back on track. It may simply push a new wave of redundancies back to later in the year," he said.

However, he welcomed the concept of Freeports as a way of reducing the red tape and delays at UK borders and encouraging local logistics businesses and services.

In the eight new freeport areas announced, no duties will be charged on goods or materials until they leave the zone and none if they are then re-exported. That could mean virtual tariff-free manufacturing and exporting for companies established within the secure customs zones.

The new ports will be sited in East Midlands Airport, Felixstowe & Harwich, Humber, Liverpool City Region, Plymouth, Solent, Thames and Teesside.

"That’s great news, but only really serves to undo the self-imposed damage created by Brexit," he said. "Before we left the EU, there were no tariffs to pay on materials arriving from Europe and no need to create an exempt area.

"While there was also the promise of new spending on ports infrastructure, underwater hubs' and rail centres, ultimately, this was a Budget that was big on ideas but strapped for cash."