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Industry Reactions to Autumn Budget

It was a budget that froze fuel duty, announced new ‘levelling-up’ infrastructure schemes, and confirmed continued funding for the switch to electric.

22 November 2021

Industry Reactions to Autumn Budget

Business organisation Logistic UK reacted by saying more improvements are required to raise the quality of parking spaces for HGV drivers:

“Logistics UK is happy to hear the Chancellor’s commitment to improve the quality of HGV parking spaces available. However, as the government’s own figures estimate there is currently a shortfall of more than 1,400 spaces nationally, there is still more to be done.  The business group will remain in close contact with government on this issue, to ensure that the spaces needed are finally delivered, after more than three years of promises which are yet to be fulfilled. This is vital to acknowledge the contribution which HGV drivers make to the UK’s economy and help industry attract new recruits to the sector.”

RAC fuel spokesman Simon Williams said:

“We welcome the Chancellor’s confirmation that duty will continue to remain frozen at 57.95p a litre. With pump prices at record highs, now would have been the worst possible time to change tack and hike up costs still further at the forecourt. If duty had gone up, RAC data suggests the average price of a litre of petrol could have reached 147p taking the cost of a tank to over £80, and diesel an eye-watering 150p.

“But we’re disappointed he did not provide some respite for drivers at the pumps. As VAT is charged on the final cost at the pumps, a temporary cut in VAT to motor fuels would have benefitted drivers immediately at time when filling up the car is hurting household budgets more than ever before as well as the wider economy as people will have less money to spend.”

Road improvements

The Budget also confirmed £24bn between 2020-2025 for investment in strategic roads and delivering upgrades such as the A66 Trans-Pennine.

Minimum pay increase

There was a modest increase of just under 7%, from £8.91 to £9.50 in the minimum wage. With current inflation at over 3% and rising energy prices, this will be a welcome boost for lower paid workers in the logistics sector. However, many employers already suffering thin margins as a result of Brexit, labour shortages, the pandemic, and increased fuel prices, will undoubtably find the increased wage bill an untimely added burden.

Missed opportunity

Mike Hawes, SMMT (The Society of Motor Manufacturers and Traders) Chief Executive, said, “The effects of the pandemic continue to hurt businesses across the sector – supply chain disruption, skills shortages and punitive energy costs. The Budget included some significant steps, most notably in adjusting business rates to allow relief on renewable energy and the extension of the super-deduction. Together with the Global Britain Investment Fund which provides £817m to support the transition of automotive manufacturing and the £620m announced last week for incentives, as well as investment in charging infrastructure, these are a recognition of the importance of the automotive sector and its ability to drive innovation and exports, and to create well-paid, highly skilled, green jobs across the country.

“However, if we are to attract the investment in plant and machinery that a modern, competitive and decarbonised industry needs, a more fundamental change in business rates is still necessary – one that actually incentivises the continued investment that factories need to be at the cutting edge of operational efficiency. The Budget was also a missed opportunity to support the many supply chain businesses which are suffering cash flow shortages due to stoppages arising from the semiconductor shortages.”

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