RHA Reaction to the Autumn Budget 2024

We welcome the Chancellor’s announcement to continue the fuel duty freeze after much RHA campaigning.

Transport operators are essential to economic growth; with operating costs increasing and margins tightening, the last thing these vital businesses needed was a rise in fuel duty.

We are pleased the Chancellor has listened to the concerns of our members.

Other announcements in today’s Budget present a mixed picture for haulage, coach and van businesses.

On roads investment:

The continuation of work on major strategic roads – the A47, A57 and A75 – is welcome, but we are concerned about delays and cancellations to other significant road projects such as the Lower Thames Crossing and the A303 Stonehenge tunnel. Economic growth will only be achieved with investment in the infrastructure to support it. Whilst we await the announcement of RIS3, we urge the Government to ensure that it backs new projects that eliminate congestion, connect the country, and unlock economic growth.

On local roads maintenance:

We welcome the additional £500m in the local road maintenance budget allocated for potholes, however it is vital that local authorities receive long term road maintenance funding to enable better planning and scheduling of essential road and pothole repairs. Investment in new and improved roads will reduce congestion and increase productivity.

On Vehicle Excise Duty and the HGV Levy:

We are disappointed that the Heavy Goods Vehicle (HGV) VED rate and the HGV Levy will rise with RPI from 1 April 2025. This will add further cost pressure on vehicle operators at a time when the industry is facing a range of other rising costs.

On Business Rates reform:

The proposed changes to Business Rates to introduce a higher multiplier for the most valuable properties could unfairly penalise logistics businesses who operate large warehouses. Logistics premises including warehouses require a larger footprint but offer a relatively low return on land values. Logistics businesses need a rates system that supports growth and incentivises success by not punishing those that are seeking to move to larger premises or operate in in high-cost areas.

We will engage with the Treasury to ensure that our industry is not unfairly penalised by these changes.

On the increase to employers’ costs:

Operators are clear the proposed rise in Employers’ National Insurance to 15% from 6 April 2025 will make hiring staff and creating jobs harder.

More than 95% of the haulage industry are small and medium sized companies who cannot afford more costs at a time when insolvencies in our sector are at a record level. We want the policymakers to work with us to minimise the financial burden placed on businesses, not add to them.

We therefore welcome the Chancellor’s commitment to increase the employment support allowance for small businesses by a record amount, more than doubling it from £5,000 to £10,500.

Increasing the minimum wage above inflation will impact all costs within the supply chain with businesses will have to accommodate this increase against a challenging economic backdrop.

On Full Expensing:

Full expensing has been a transformative tax reform, and the announcement from the last Government looking to extend it to leased assets was welcomed by a significant proportion of haulage and coach operators. We are therefore concerned there is no mention of this proposal in the budget documents and will be seeking clarity from the Treasury as to its intentions.