Opinion: unpacking the spring Budget

An unprecedented year unfolded between 2020’s spring Budget and this year’s, which was announced by the Chancellor earlier this month. COVID-19, with its resulting lockdowns, and EU Exit have impacted our industry and the wider economy in ways never seen before. Our submission to the Chancellor prior to the 2021 Budget highlighted the best ways to assist logistics in its recovery from both the pandemic and the impact of Brexit, by focussing on skills and apprenticeships in logistics, infrastructure investment, decarbonisation and the need to delay a rise in Fuel Duty.

Unemployment, which was at an all-time low last year, has risen to a high of 5%, with further increases predicted throughout the rest of 2021. Though freight is beginning to see a recovery in road and rail movements towards levels similar to those before the pandemic, we would like to have seen more immediate government support, such as loans or grants, as well as investment in training programmes, to help organisations affected by Brexit and the coronavirus crisis.

We were pleased our advice on the need to keep Fuel Duty frozen was heeded, continuing a decade of frozen duty, particularly as any increase cost for freight could have impeded economic recovery. Looking forward, we are continuing to call for greater incentives to support decarbonisation in our sector as logistics firms look towards alternatives, and longer term this work will take on greater urgency due to the impending announcement on the date by which diesel HGVs will no longer be sold in the UK.

Regarding skills, while we warmly welcome the additional funding and flexibilities, there is still a significant gap in government support for Level Two roles in logistics, such as HGV drivers. These positions are poorly served by the Apprenticeship Levy, which does not provide the scale or speed required to fill the high number of vacancies in the sector. At a time when the industry is suffering significant skills gaps and the loss of EU workers, we are pressing for interest-free loans or grants to help fill the gap and provide employment opportunities to workers affected by COVID-19.

Logistics UK has been at the forefront of the debate on Freeports, in supporting them as well as working on details with government to make them as practical and efficient as possible. We are confident the confirmation of eight successful Freeport bids will support business and industry in those locations, and we would encourage additional zones in the future.

The additional COVID support announced by the Chancellor is a relief for many, and news we greatly support, as these measures should provide a huge benefit for affected businesses. Throughout the previous year, Logistics UK has repeatedly used member-based evidence, collected in part by our regular industry surveys, to flag concerns around the difficulties businesses faced in accessing government loans.

A series of further consultations, primarily focussed on the tax system, is expected in the coming weeks; there has been considerable speculation about the measures that will feature in this further announcement. Our Policy Team will assess the consultations and discuss with members at our upcoming Freight Councils to shape the Logistics UK response to government.

Across the year, we will be making sure our members receive insight on trends and events in our industry. Next month, we will also be releasing a second report on COVID-19 and how this is impacting freight, following the release of our first report at the end of 2020; in addition, our annual Logistics Report – the authoritative and comprehensive source of UK freight and logistics facts, figures and policy analysis – will be launched in late spring.

*www.logistics.org.uk/campaigns

Published On: 18/03/2021 17:00:43

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