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Budget 2020: The Briefing

Leaders from the world of logistics had various comments about how many of the changes made might impact the logistics sector.

Relevant topics that arose from the budget included a potential shift in delivery methods, facilitated by the closing of a red diesel tax loophole, while increasing incentives and charger access for electric vehicles. Also covered were suggested improvements to the UK’s infrastructure network, including the quality of road and rail. Perhaps one of the most time-sensitive issues addressed by the budget was the mitigation of financial damage to businesses caused by COVID-19. 

Green vs Red

On the topic of vehicle emissions, Rosie Bailey, director of business development at CitySprint said, “The logistics sector plays a key role in facilitating economic activity and trade in the UK. As a result, we are pleased to see that the fuel duty freeze will continue, but we also welcome the introduction of new measures designed to help reduce emissions, protect the environment and encourage greater use of cleaner vehicles. 

“The logistics industry has always understood its responsibility to reduce the impact of its operations on the environment. With the focus on urban congestion and air quality, we have long called for further investment in the infrastructure needed to support greener vehicle types. So, today’s pledge that drivers will never be more than 30 miles from a rapid charging station, along with a reduction of taxes on zero emission vehicles, is great to see. 

“Recent research we carried out amongst UK SMEs highlights that sustainability is moving up the agenda for businesses, however there has been a general consensus that the Government has been falling short in terms of support when it comes to sustainability. Businesses have not felt the Government is doing enough to support and incentivise them to adopt more sustainable policies. While the announcements are a good start, there is always more that can be done to help the UK hit its ambitious target of becoming a zero emissions economy by 2050.” 

For Cold Chain Federation chief executive, Shane Brennan, the concern lies with the time frames involved in the diesel tax change: “Removing access to red diesel for cold chain hauliers adds £150 million of costs to the businesses we rely on to keep our food safe. Two years is not enough time for businesses to make the changes to their fleet necessary. Far from supporting businesses to make investments in greener alternative technologies, this tax change will force businesses to batten down the hatches and use existing equipment for longer. 

“Raising taxes in this way will generally undermine the confidence across the food supply chain and we now seek urgent talks with Ministers to understand if they are serious about helping food chain businesses to adapt to this change.” 

Improving the network

The infrastructure associated with vehicles didn’t stop with fuel and electricity in the budget. Christopher Snelling, head of UK Policy at the FTA, comments, “FTA has been urging government to commit to a programme of infrastructure improvement for several years; we are thrilled to see the Chancellor has pledged to spend billions of pounds on upgrades across the UK. Businesses within the logistics sector rely on safe, effective and well-maintained road networks to keep goods moving across the UK, but the poor state of roads across the nation has compromised their ability to do so; the economic performance of the country has suffered as a result. Now, we are calling on government to press ahead urgently with its plans; the UK’s road and rail network has been subject to chronic under-investment for many years and this programme is long overdue.” 

But Robert Keen, speaking as director general on behalf of the BIFA, the trade association that represents the UK's freight forwarding companies and logistics service providers, says his members will be waiting to see whether all the borrowing and spending that has been outlined in the budget actually happens: “Whilst the investment in road transport infrastructure might make a difference to our members' activities, we should not forget that back in November 2015, the then Government announced that funding would be provided for the largest road investment programme since the 1970s. I am not sure that the country’s network of A roads and motorways has become significantly less congested since that announcement.” 

COVID-19 

Commenting on the budget, Kinaxia Logistics’ chief executive Simon Hobbs said, “It’s great to see the immediate and positive reaction to minimise the financial impact of the coronavirus on businesses and the economy. 

“The 14-day Statutory Sick Pay recovery will assist those businesses with less than 250 employees. Financial support for the NHS is also welcomed,” he concludes. 

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