Logistics ‘overlooked’ in Budget
Disappointment at lack of sector focus in a Budget that generally increased tax and spend.
Image by Lauren Hurley / No 10 Downing Street
CHANCELLOR RACHEL Reeves has introduced a Budget to raise taxes by £40 billion and promised investment in NHS, HS2 London Link, schools and housebuilding.
UK Warehousing Association CEO Clare Bottle said: “It is frustrating in the extreme that the role of supply chains – particularly warehouses – have neither been understood nor acknowledged, let alone helped with funding. From building materials to hospital beds and scanners, all will all require a functional supply chain for transport, storage and delivery
Successful infrastructure projects depend on efficient, well connected supply chains. While the budget has announced funding for road and rail, yet again warehousing has been overlooked. We had hoped that the new Government would recognise that logistics is the fundamental backbone to growth of the UK economy and listen to our key ‘asks’. However, from that point of view, this budget feels like ‘déjà vu’.”
“On Business Rates, we note that there will be relief for retail, hospitality and leisure businesses, but not for warehousing. This is deeply disappointing as the basis for rating assessment of warehouses is intrinsically unfair, and we will continue to make this clear to policymakers.
“This budget simply goes to prove we need a Logistics Minister!”
Logistics UK chief executive David Wells OBE, added: “The Chancellor’s decision to freeze fuel duty for a further year is welcome news for the logistics sector. Nothing moves without logistics.
“The sector operates on very narrow margins – often only 2.5% – with fuel representing a large proportion of the weekly operating cost for hauliers.”
Dodging a bullet in terms of fuel duty, logistics businesses may be concerned about changes on national insurance contributions.
Parcelhero’s head of consumer research, David Jinks said: “Not only will employers' National Insurance contributions rise from 13.8% to 15%, but also the threshold at which businesses start paying NI on workers’ earnings will be lowered from £9,100 to £5,000. That threshold change is likely to be at the worst end of small employers’ fears and could result in lower pay rises for existing employees and delayed expansion plans for many companies.”
Cold Chain Federation CEO Phil Pluck said: “A £40 billion increase in taxation, where we see businesses directly contributing £25 billion to increased national insurance, is concerning. Especially so when you consider an increase in the National Minimum Wage and possible increases in borrowing rates due to pressure on inflation due to new fiscal borrowing rules.
“[That said,] I welcome the decision to freeze fuel duty and extend full expensing, both of which the Federation has strongly advocated for.”
Shipster founder and MD Tony Cheetham, added: “As an SME, the increase in employers' NI contributions will be a hard pill to swallow for us. As a growing tech company wages are nearly 75% of our entire budget.
On a more positive note, Tony highlighted a role for GB Energy.
“Labour fully understands that we need strong government leadership in the vital sectors of our economy, and that the government can get directly involved when private businesses are failing us. I hope this will eventually be enacted in the water, and transportation markets at some point in the near future.”
