Long term economic growth can only be achieved with a supported transport sector

Our Managing Director Richard Smith reflects on this week's CBI Annual Conference and how two thirds of businesses think the Budget will damage investment.

The CBI (Confederation of British Industry) Industry has warned that some recent changes will “increase the burden on business and hit their ability to invest.” 

At the CBI’s Annual Conference this week, they revealed their post-Budget survey which indicated that two-thirds of all firms think measures in the Budget will damage investment with many business owners already having to change course when it comes to the recruitment and retention of staff. 

As the CBI’s CEO Rain Newton-Smith said, “margins are being squeezed and profits are being hit” when you hit profits, you damage competitiveness and ultimately that “hits growth.” The road transport sector is the engine room for long-term and sustainable growth across the United Kingdom. 

However, it has been an incredibly difficult few years with lower margins and more insolvencies than at any time in recent memory. There were some positive developments in the recent budget, such as the decision to continue with the fuel duty freeze. Equally, there were some unwelcome developments. 

The increase to employer national insurance contributions has left many operators with a lot to think about - as they add up the additional costs they now have to factor in. As running costs increase and margins tighten, higher national insurance contributions (15%), whilst lowering the threshold is a challenge for firms in an industry where 95% are small and medium sized businesses. 

Since the budget, when speaking with members across the sectors we represent; it’s clear these changes will impact businesses of all shapes and sizes, be that operators of HGVs, LGVs or coaches. These changes and other cost implications from employment law reforms are increasing the strain on firms and will hinder the ability for some to expand or hire new staff. We’ve been consistent that the Government’s vision for long-term economic growth won’t be realised without supporting our sector – a sector that contributes billions to the economy and is key to daily life. We must see more collaboration between business and government.

Planning reforms, investment in infrastructure and clarity and certainty to invest are all necessary. We're key economic enablers and we must be on the front foot to future-proof the supply chain. Policymakers need to work alongside us to minimise the financial burden and the regulations placed on businesses.
As our members await further announcements to better understand Government plans on infrastructure, we’ll continue to engage with MPs, Ministers and stakeholders across the country. Ultimately, the next few months will give us some indication as to whether firms can invest.

The true test of the recent budget will be whether businesses can navigate difficult times to generate the growth that’s required to boost the economy. Businesses will therefore need the support of decision-makers in Westminster, Holyrood, Cardiff Bay and Stormont to remove barriers to growth. We stand ready to work with them to achieve this.