What does the Budget Mean for Haulage Companies: Part 1

It’s that time of the year again. The clocks have gone back, the nights are drawing in … and the government has released its budget for 2018-19. As always, there were a lot of changes and a lot that stayed the same. And, all of this has a major impact on haulage jobs. Read on for some of the key takeaways from the chancellor’s announcement – and then don’t miss part two, where we look at industry reactions.

Infrastructure

The government has made a lot of big headline announcements this year, with planned changes to the country’s transport infrastructure grabbing the most attention.

Looking at the numbers on show, it’s easy to see why. A huge £30 billion is committed to the largest strategic roads investment programme in UK history. A further £28.8 billion, raised by vehicle excise duty, will also be used to create a National Roads Fund. Finally, local authorities will divvy up a total of £420 million to spend on fixing potholes. If this money is used right, it should make haulage jobs a lot easier to accurately plan and complete, as drivers shouldn’t have to deal with unexpected closures and poor road quality harming their vehicles.

The budget also reflects government intentions to build infrastructure outside of London and the south east. A promised £240 million will be split among metropolitan areas, to be spent on public transport, with £71.5 million for the West Midlands and £69.5 million for Greater Manchester the biggest cash injections of the bunch.

Finally, and perhaps most significantly for hauliers, much of the £28.8 billion mentioned above will be spent on major improvement projects, including the Trans-Pennine route, the Lower Thames Crossing, and the badly needed direct link between Oxford and Cambridge. Completion of any of these would enable companies to complete haulage jobs quicker and at lower rates, boosting the industry.

Business Rates and Allowances

The budget also included some direct enticements to businesses. At the lower end of the scale, companies can receive extra business tax rates relief for simply making toilets available for public use. A 2% capital allowance is also to be added on all non-residential structures and buildings, and the annual investment allowance will be increased to £1 million per business for all qualifying spending made between 1 January 2019 and 31 December 2020.

While drivers may not see the direct effects of these changes, logistics and management workers are likely to welcome them.

Apprenticeships and Employment Law

Introduced in April 2017, the apprenticeship levy has been somewhat controversial. Employers got more control over how apprenticeships were structured and funded, but they were also hit with a new compulsory bill (0.5% of the pay bill in excess of £3 million).

Thankfully, the Treasury is making efforts to tackle these concerns. Levy-payers are now able to access a £450 million training pot for apprentices and subbies, and £20 million of matched funding has been made available for various skills training schemes across the country. Lastly, small and medium businesses will see their mandatory co-investment rate halved to just 5%. While none of this is aimed directly at the transport industry, the importance of apprenticeships to haulage jobs means that smaller enterprises, especially, should feel some relief at the announcement.

Taxation

Finally, the budget also made changes to how transport is taxed. The big announcement was the continued freezing of fuel duty, now in its ninth consecutive year. Alternative fuels receive continued protection, with the announcement to maintain the fuel-duty differential until 2032, pending a 2024 review.

Ecological concerns are balanced against industry wants, most notably with the decision to delay rolling out new emissions-based charging regimes on vans until the impact of worldwide harmonised light vehicles test procedures (WLTP) can be measured. Details of this are expected in the spring, and the decision to hold off can be welcomed as a commonsense commitment to evidence, respecting industry concerns that slapping a higher tax on vans would merely penalise those who use them to complete haulage jobs.

While there was a lot more in the full budget than is captured here, we’ve done our best to summarise the most important and relevant concerns for the driving business. Come back for part two to see how leading industry figures have reacted – and where they think the government could have done more.

Norman Dulwich is a Correspondent for Haulage Exchange, the leading online trade network for the road transport industry. Connecting logistics professionals across the UK and Europe through their website, Haulage Exchange provides services for matching haulage jobs with available drivers. Over 5,400 member companies are networked together through the Exchange to fill empty capacity, get new clients and form long-lasting business relationships.

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Author: Desiree Michels