UK Autumn Budget: Chancellor “Must Intervene Positively to Support Fleet Operators”

Andrew Galliers (pictured), senior manager and transport and logistics sector specialist at accountancy firm, Menzies LLP, offers a personal view on this week’s important UK budget statement.

The Chancellor must intervene to support the transport and logistics sector to protect businesses from mounting pressure due to low margins, environmental legislation, new technology and staff shortages.

A forward-looking plan for fuel duty

With multiple pressures facing the transport and logistics sector and bearing in mind the crucial role it plays in supporting business activity, the Chancellor needs to help fleet operators to plan ahead. Following on the fuel-duty freeze announced in the Spring Budget, he should consider providing more clarity about what the future holds for fuel duty – time for a fuel duty taper perhaps?

Transitional support

There has been a concerted drive to switch to green fleets in recent months, to ensure compliance with tightening air quality standards and the rules that apply in Clean Air Zones. Any help the Chancellor can offer to transport and logistics businesses as they transition fleets will be welcomed.

With no joined-up plan on Clean Air Zones, operators are at the whim of local mayors’ decisions on what they want for their community, which may leave local fleet operators exposed. Creating a level playing field is important and the Government must consider the needs of businesses during the transition period.

Incentives to encourage tech adoption

There is growing interest in the potential of driverless vehicles to transform the transport and logistics industry. Whilst large corporates are well-placed to take investment risks in emerging technologies, smaller businesses may require incentives before taking a step towards the future.

The worsening driver shortage is undermining the sector’s sustainability. This is evident in the latest figures about CE licence holders (drivers of vehicles over 3,500kg or a trailer over 750kg) – only 11 per cent of licences are held by the under 30s, compared to 67 per cent held by the over 40s. The driver shortage is expected to reach 1.2 million by 2022. If the Chancellor were to take steps to encourage take up of apprenticeship schemes, particularly among small businesses, this would be a positive step in alleviating the shortage.

While it is positive to see that there has been initial support for apprenticeship schemes, the uptake amongst small and medium-sized businesses has been low, with some unable to access the funding and others wary of taking on staff who don’t necessarily generate revenue from day one. Existing schemes must be made to work for all to increase participation across the board.

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