The Budget announcement represents one of the most important times of the year for business owners, impacting investment and infrastructure in major ways – and the Chancellor’s recent announcement included a number of proposals that will affect the haulage industry.
Looking back to 2017, we saw a number of changes that worked in the haulage industry’s favour. The anticipated fuel duty rise was scrapped, saving drivers an average of £160 over the course of a year, while Vehicle Excise Duty on HGVs and Road User Levy rates were frozen. Most significantly, investment in public infrastructure was raised to £24 billion, with £45 million set aside for potholes alone.
It remains to be seen exactly how this year’s announcement will impact the industry, but we’ve taken a look at the Budget and highlighted some of the areas most relevant to hauliers, transport operators and logistics managers.
What has been announced?
Brexit continues to loom large, with the country’s future remaining uncertain across most business sectors. However, the 2018 Budget does contain a few elements that are sure to impact the haulage industry:
- The National Roads Fund promises significant improvements to road networks, with £28.8 billion allocated to improving road conditions; £420 million has been allocated to pothole repair on local roads.
- Major ‘transformative projects’ such as the A66 Trans-Pennine route and the Lower Thames Crossing, offering quicker and more efficient routes.
- Fuel duty has been frozen for a ninth successive year, with the fuel duty differential maintained until 2032 – promoting the use of non-diesel fuels to help reduce carbon emissions.
- Vehicle Excise Duty (VED) on HGVs frozen for 2019-20 to support the haulage sector.
How will it impact the industry?
Although fuel duty and VED have once again been frozen, the recent poor economic climate and the spectre of Brexit on the horizon mean this is little more than a stay of execution for transport companies at present; cuts to these duties would have been welcomed, promoting industry growth during a testing period for the country.
The allotted investment in road networks is also up for debate: while the increased investment is a step in the right direction and should lead to long-term benefits, in the short-term the haulage industry is likely to experience some significant hurdles. Major roadworks generally run into months and years, with hauliers likely to experience serious delays as work is ongoing.
A mixed reaction
The general consensus across the haulage industry is that the 2018 Budget is a missed opportunity for economic growth. The £420 million designated for pothole repairs is seen as a fraction of what is required to fully refurbish the country’s roads following years of under-investment, and will lead to additional costs as poorly-maintained roads continue to damage HGVs. The freeze on fuel duty has been viewed in a similarly negative light, with many concluding that a duty cut would have led to much-needed economic growth.
On a more positive note, the freeze on VED for HGVS has been welcomed by the Freight Transport Association (FTA), while the fuel duty differential being extended until 2032 is seen as a positive step towards de-carbonising the transport sector, with both the FTA and Anaerobic Digestion & Bioresources Association (ADBA) welcoming the move.
If you are looking for additional haulage partners during challenging times for the transport and logistics industry, we provide great opportunities for haulier partnerships to help you maximise the capacity and profitability of your fleet.