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UPDATED: Budget 2016 - the industry reacts

UPDATED: Budget 2016 - the industry reacts

Reaction from the transport and logistics industry to the Chancellor's Spring 2016 budget has been largely positive.

Advanced Supply Chain: infrastructure announcement 'a small step'

Mike Danby, CEO of Advanced Supply Chain, a logistics supplier to some of Britain's biggest brands, said: "Congestion is crippling the industry and the economy, and ensuring we maintain and improve the current road network, as well as build new roads to increase overall capacity should be absolute imperatives for the Government. The infrastructure announcements in the Budget are a small step towards the so-called 'Northern Powerhouse', but road networks across the country need attention.

"Lower fuel duties drive the economy forwards, which leads to greater tax revenues. Increased petrol prices make it harder for a vast range of businesses to generate profits, as well as hitting family budgets. The move by the Chancellor to freeze fuel duty is welcomed, but more needs to be done to ensure the haulage industry can continue to be a driving force behind the economy.

"In addition, the Treasury's revenues could be directed to driver training, in the form of grants. This would help businesses tackle the substantial driver shortages the haulage industry is struggling to cope with."

UKWA: fuel duty freeze 'warmly welcomed'

Peter Ward, CEO of the United Kingdom Warehousing Association (UKWA) responded to the Budget:

“The Chancellor’s comments regarding the global economic outlook reinforce the fact, if indeed it needed reinforcing, that high professional standards, lean operations, innovation and a lot of hard work will remain fundamental requirements for companies operating in the 3PL sector.

“The decision to freeze fuel duty will be warmly welcomed by UKWA members. It will reduce the cost pressures on UK supply chains and, it is to be hoped, stimulate further growth in the nation’s economy.

“By taking this action Mr Osborne has gone some way towards levelling a playing field that many people believe has been tilted against British logistics firms who compete with European operators whose lorries arrive in Britain filled with enough cheap fuel for a week’s work.

“Mr Osborne’s ongoing commitment to investment in road building and other infrastructure projects is also pleasing.

“The country faces some serious choices on infrastructure spending in the coming years as the many and varied social changes that impact upon our traditional ways of life continue apace.

“Societal shifts will lead to inevitable growth in logistics activity and substantial investment on roads and other key infrastructure projects must be given priority. Mr Osborne appears to realise this.

“I am sure UKWA members will also be glad to see the headline rates of corporation tax continue to fall.”

Investec Asset Finance: 'welcome tax reforms'

Mike Francis, Head of Investec Asset Finance, comments on the Budget’s impact on SMEs: “Helping UK businesses to grow in the midst of economic challenges and to compete with multinationals is an enormous challenge. Yet several measures emerged in [the] Budget which will make life easier for UK businesses, particularly smaller ones. Notably, Osborne has pledged to back business with a lower corporation tax rate and a big reduction in small business rates.
 
"In my view, these reforms are significant and very welcome. Corporation tax and business rates are often some of the largest bills a company has, and the outlay can be of great impediment to growing businesses. Investec Asset Finance has provided corporation tax funding for many SMEs over the past year, highlighting the very real need for funding support.

"Crucially, a reduction in tax and rates, and alternative funding options will help businesses preserve working capital and enable them to invest back into their business. Given that Osborne has also pledged a major overhaul of corporation tax reliefs, however, it is very difficult to know exactly who the winners will be – the details will emerge in the Finance Bill.”

FTA: Halving Severn tolls 'a step in the right direction'

News that tolls on the Severn bridges are to be halved has been described as a step in the right direction by the Freight Transport Association (FTA).
 
George Osborne announced as part of his Budget statement today that the Government will halve tolls on the Severn River Crossings, once the Crossings are in public ownership, subject to public consultation. Alongside this, it will also review the costs and benefits for developing a free-flow barrier-free tolling system.
 
The Severn Bridge tolls are the most expensive in the UK, costing £6.60 for a car, £13.20 for a van and £19.80 for a coach or lorry.
 
Responding to the Chancellor’s announcement, Ian Gallagher, FTA Head of Policy for the South West and Wales, said: “As always the devil is in the detail – the Chancellor has said that the tolls will be reduced when the bridges are in public ownership but this is subject to public consultation. If the Government must consult, this should be carried out prior to handover so that a reduction in charges is in place from day one."
 
It is planned that the bridges, which are administered by Severn River Crossing plc, will revert back to public ownership in 2018.  It is predicted that there is likely to be an outstanding debt of approximately £50 million on the bridges at this time.

“FTA would urge the Government to look at starting the process of free-flow technology prior to the handover in 2018.”

KPMG: Chancellor 'dodges airport capacity issue'

James Stamp, Head of Transport at KPMG, commented on the Chancellor’s investment in transport: “It is encouraging that the Government has committed to investing in transformative rail projects through Crossrail 2 and HS3, as well key roads in the North of England.

"However, The Prime Minister might like to reflect on the Chancellor’s call for long-term solutions to long-term problems, as he continues to prevaricate on the very real long-term problem of creating new airport capacity, which is vital in affirming our position in the global economy and the wider connectivity agenda.”

CILT: Government's infrastructure investment 'is welcomed'

Kevin Richardson FCILT, Chief Executive, The Chartered Institute of Logistics and Transport, commented: "The Government’s commitment to investing in large scale national infrastructure projects to make Britain fit for the future is welcomed.

"The Chancellor’s pledges to deliver infrastructure improvements ensure that the logistics and transport industry can continue to drive UK economic growth and serve the fast-growing population of the United Kingdom."

Meanwhile, Richard Threlfall, Partner and UK Head of Infrastructure, Building and Construction at KPMG, commented: “The jam was carefully but thinly spread across the North-South divide as the Chancellor endorsed further development work on both Crossrail 2 and HS3.

“Neither scheme will become reality before the 2030s but Crossrail 2 will proceed quicker because much of the preparation has already been done. HS3 meanwhile remains a concept searching for definition. The Chancellor continues to walk the tightrope of nudging forward the Northern Powerhouse concept he has championed, whilst knowing that in the short term little can be delivered to satisfy the expectations he has raised.”

David Rewcastle, Partner and Head of Transport and Infrastructure at law firm Bond Dickinson, said: “It is pleasing to see the Government’s commitment to improvement in the Transport and Infrastructure sector with a spread of investment across the north and south of Britain.

"The Budget includes a number of financial commitments following on from some of the promises made by the Conservatives in their election manifesto including the upgrade and creation of new transport infrastructure in the north as well as eye-catching projects such as developing HS3 and Crossrail 2.”

ParcelHero welcomes freeze on fuel duty

The international parcel broker ParcelHero has welcomed the freezing of fuel duty. Said its Head of Consumer Research, David Jinks MILT: "With the basic price of fuel being at an historic low, raising fuel duty might have seemed like quite a painless option for the Chancellor; but any increase would have been reflected in increased fuel surcharges by delivery companies, making the cost of delivering items more expensive and hitting SME traders hardest. It’s welcomes news this anticipated rise will not happen."

ParcelHero also welcomes the news that more than £230m has been earmarked for road improvements in the north of England, including upgrades to M62 and upgrades of A66-A69.

Jinks said: "Congestion in the North of England increases delivery times and unnecessary emissions. The new infrastructure improvements will help UK couriers speed up deliveries while further reducing the industries carbon footprint.

"The halving of the toll for the Severn crossing is also welcome news and we hope consumers will see that reflected in costs of sending items to and from Wales," Jinks added.

There was also some good news for the many SMEs and online marketplace traders who use ParcelHero’s parcel broker service. The annual threshold for small business tax relief is to be raised from £6,000 to a maximum of £15,000, exempting 600,000 firms; and the headline rate of corporation tax - currently 20% - is to fall to 17% by 2020.

Jinks concluded: "It should be noted that the Office of Budget Responsibility (OBR) based its growth figures on continued membership of the European Union. ParcelHero believes this is vital for businesses and customers regularly trading and sending items to the rest of the Union. ParcelHero’s research suggests leaving the EU would add 30% to the price of an average item sent from remaining EU countries."

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