Autumn Statement – what it means for our industry
Today’s Autumn Statement has welcome news for the road transport industry on Vehicle Excise Duty (VED), business investment and planning reforms.
We are delighted the Chancellor has listened to RHA’s campaigning efforts on several fronts. Hauliers and coach operators keep goods and people moving – and are vital to our economic vitality.
We are pleased to see VED for HGVs and the HGV levy frozen for 2024-25. This follows our recent campaigning and will support hauliers who are facing significant cost pressures. The cost of operating an HGV has risen by nearly 10% over the past 12 months in the face of thin average margins of just 2%.
Our industry is experiencing reduced activity and fewer goods being moved due to cost-of-living challenges. Road freight volumes are down by 10% and we have seen an increase in insolvencies with reduced profitability.
We welcome the announcement on full expensing to make the change announced in the Spring Budget permanent. Firms will be able to claim back the tax on buying new plant and machinery, including vans, lorries and warehousing equipment.
We are also pleased that that the Chancellor acknowledged concerns that planning is often a barrier to investment in major infrastructure. The introduction of a premium planning service with guaranteed accelerated decision dates for major applications and new powers to hold councils to account is welcome. A strong network of safe, secure roadside truck parking facilities is a key priority for us.
The new Investment Zone deals are much needed and we urge that they’re supported with high-quality road infrastructure.
We also support Government action in creating more certainty for investors in low-carbon infrastructure. This is through extending the critical national priority designation for nationally significant low-carbon energy projects.
We continue to call on the Government to introduce an emissions-linked rebate to encourage hauliers and coach operators to switch to low-carbon fuels such as HVO.
Finally, the £2 billion funding being made available to support the manufacturing and development of zero-emission vehicles is welcome, however we need to see more concrete plans on how this funding will be targeted towards commercial vehicles.
We will be examining the detail of today’s announcements and continue working closely with the Government and the Opposition ahead of next year’s General Election.
Other Key Measures Announced
- The Government will uprate VED rates for cars, vans and motorcycles in line with RPI from 1 April 2024 in the Autumn Finance Bill 2023. To support the haulage sector, VED for HGVs and the HGV levy will both remain at 2023-24 rates for 2024-25. The National Minimum Wage will be increased by 9.8% to £11.44 per hour.
- The Government will strengthen the capacity of the planning system to deliver a better service for businesses, including introducing new premium planning services across England with guaranteed accelerated decision dates for major applications and fee refunds wherever these are not met.
- £50m funding for increasing apprenticeships in key growth areas where there are shortages, such as engineering.
- National Insurance (NI) will be cut by 2%, and NI relief for employers of veterans will be extended by a further year. Class 2 NI will be abolished and Class 4 will be cut by 1%, providing savings for the self-employed.
- Benefits will be increased by 6.7% next April, in line with the inflation figures in September.
- The new State Pension will be increased by 8.5% to £221.20 per week, an increase of almost £900 per year, and the Government will consult on savers having a legal right to require a new employer to pay new contributions into an existing pension pot.
- “Full expensing” for businesses – which allows them to claim back 25p for every £1 invested in IT, machinery and equipment – will be made permanent.
- Extension for another year of both the Small Business Multiplier and 75% business rates discount for hospitality venues.
- Reforms to the planning system to allow local authorities to recover the full cost of business planning applications in return for meeting planning deadlines, and to allow any house to be turned into 2 flats, providing there are no exterior changes.
- Measures will be introduced to cut National Grid access delays by up to 90% and offer £10kp/a off energy bills for those living close to power infrastructure.
- Investment boost to the Office of Foreign Investment to establish a concierge service to encourage more foreign direct investment.
- £4.5bn of support to attract investment into advanced manufacturing sectors, including £2bn for zero-emission investment in automotive sector, £975m for Aerospace, £520m for life sciences, and £960m for green industries growth accelerator.
- Additional £500m to fund further innovation centres to make the UK an AI powerhouse.
- Implement changes worth £280 million a year to simplify and improve R&D tax reliefs.
- Work with industry to provide additional tax relief for visual effects expenditure for Film and TV production.
- Tax relief for freeport and financial incentives for investment zones will be extended from 5 to 10 years, and a £150m Investment Opportunity Fund will be established to catalyse investment into the programme.