Budget countdown: Nine weeks to go

In the weeks approaching the Autumn Budget, Logistics Magazine will be examining the critical priorities that we urge the Chancellor of the Exchequer Rachel Reeves to address when she presents her Budget to the nation on 26 November. On the agenda will be a closer look at prospects for infrastructure, decarbonisation, innovation, skills and trade, but to launch the series, Logistics UK’s Acting Chief Executive Kevin Green outlines why the top fiscal priority for the government has to be avoiding further increases in the tax burden on logistics in the new Budget:

“Logistics costs are embedded in everything we buy, from food and medicines to construction materials and consumer goods, so rising taxes on our sector, whether through fuel duty, employer National Insurance Contributions (NICs) or business rates directly translate into higher prices for households and businesses.

“With this in mind, we are urging Chancellor Rachel Reeves to seize the opportunity and boost investment for logistics businesses rather than implementing tax rises that would stifle growth and fuel inflation.

“The rise in employer NICs will cost the logistics sector an estimated £1.7 billion this year and any further increases in employment costs would be a direct tax on jobs, damaging competitiveness and investment in skills.

“Fuel duty is another major pressure on industry, as well as for consumers. In our latest Logistics Industry Survey, over 60% of respondents said cutting fuel duty is the most important action the government could take for the industry. This means it is vital that the five pence per litre cut to fuel duty remains in place beyond March 2026. The logistics industry already pays more than £5 billion each year, over 20% of all fuel duty collected by HMRC. A rise in fuel duty would risk driving up inflation and harming the health and competitiveness of the sector. 

“We also urge the government to work with our sector on a long-term fiscal roadmap for road pricing and vehicle taxation. Any new approach must take into account that logistics is an integrated system covering various transport modes – with logistics operators needing to make rational judgements over transport modes in order to move goods in the most safe, sustainable and efficient way.

“Business rates are also a significant fixed cost for logistics. Warehouses, distribution centres and logistics hubs across the country face rising bills, with proposals for a higher multiplier on properties with a rateable value above £500,000 set to disproportionately affect our sector. This will add millions to operators’ costs, which will ultimately be passed on through supply chains to retailers and consumers. We are therefore urging the Treasury to ensure reforms to the business rates system protect investment in logistics infrastructure and do not create additional inflationary pressures.

“The Budget is a chance to unlock business investment and choosing investment over taxation will not just support logistics, it will increase competitiveness and drive growth across the entire economy.”