Wednesday, March 11, 2020

Budget Spending Commitments on Logistics Infrastructure 'Spin and Noise' Till the Money Appears

Previous Government Promises for Transport Sector Have Never Transpired
Shipping News Feature

UK – With the Budget topping the agenda we take a look at how the transport sector has reacted so far to those factors which affect it. And from the reactions up to now it seems the industry has little faith that the government's fair words will lubricate the parsnips any time soon.

Logistics related industry lobby groups were quick to comment on the Chancellor’s statement with Robert Keen, the Director General of the British International Freight Association (BIFA), the trade association that represents the interests of the UK's freight forwarding companies, sounding what can politely be described as a note of doubt, saying of the promised borrowing and spending outlined:

“Until it happens, it is all spin and noise. Whilst the investment in road transport infrastructure might make a difference to our members' activities, we should not forget that back in November 2015, the then Government announced that funding would be provided for the largest road investment programme since the 1970s.

“I am not sure that the country’s network of A roads and motorways has become significantly less congested since that announcement. BIFA has said repeatedly that it is imperative that new road building and road reconstruction projects are not only implemented, but developed in such a way as to maximise their functionality to the BIFA members, which as freight forwarders, use them to move Britain’s visible domestic and international trade.

“Hopefully this talk of infrastructure investment will not be just talk and we will see some spades in the ground.”

The BIFA boss is also concerned about how the spending commitments outlined in today's budget statement might be affected by a no-deal outcome at the end of this year in the negotiations between the EU and the UK, continuing:

“Speaking on behalf of BIFA’s members, which facilitate much of the movement of the UK’s visible exports and imports, we are concerned that any negative economic consequences of no-deal outcome could make today’s announcements unsustainable.”

Over at the Freight Transport Association (FTA) the contents of the treasury box have also disappointed. Prior to the budget announcement, FTA wrote to the Chancellor of the Exchequer, Rishi Sunak, to urge him to reconsider implementing his policy decision to increase the tax rate on rebated (‘red’) diesel in two years' time, something which only affects a small proportion of the industry's overall fuel use, but a policy he is going ahead with regardless.

The reason behind the policy is said to be because a hike in the price will reduce fuel use in the sector but Christopher Snelling, Head of UK Policy at FTA, points out that whilst newer diesel equipment produces substantially lower local air quality emissions, this is achieved by cleaning the exhaust before emission, not through reduced fuel use, continuing:

“The FTA is urging government to reconsider its decision to increase the tax rate on red diesel as this will be very damaging to the businesses that rely on the fuel to keep vital products and services moving across the country when it comes into force. This move will not incentivise companies to transition to newer, cleaner diesel units, because they are no more fuel efficient; if anything, it will slow progress as companies will balance the increased running costs by keeping their current equipment longer.

“We are currently working with governmental departments to assess how to accelerate progression to cleaner units, but instead of waiting for this solution, we believe the government is taking this blunt, ineffective and costly action to give the appearance of progress, without regard to the realities of the use of these units.”

FairFuelUK represents all motorists, despite founder Howard Cox’s history in the road haulage sector. Although more positive than the former commentators he took the opportunity to raise his usual complaint that British motorists are, in his opinion, unfairly taxed, saying:

“We are delighted our rookie Chancellor has listened to common sense, due to our intensive lobbying and back bench Tory pressure. And frozen Fuel Duty for an unparalleled 10th consecutive Budget including George Osborne’s instinctive one penny cut in 2011."

"Rishi (Sunak - the Chancellor) is hailed with a huge sigh of relief, by our 1.7 million supporters, motorists, motorcyclists, van drivers and hauliers. But to all the anti-internal combustion engine over reported voices, even with this insightful freeze, UK drivers remain the highest taxed in the world.

"And let it not go unnoticed, virtually all countries tax diesel less than petrol too. So, any virtue signalling green tax hike trumpeted to be in this Budget, now avoided, on diesel does not hold water. EU countries see clean diesel as the commercial heartbeat of their economies and so tax it less. The UK must do the same, especially as we are nearly free of the EU’s fiscal shackles.

"This Government must recognise, that drivers do not want to be seen just as environmental pariahs and perennial easy cash cows. We must put money back into consumer spending, free up roads congestion and incentivise drivers to move to cleaner fuels and practical solutions to help lower emissions, without the threat of ineffective vehicle bans and regressive pay to pollute taxes. Any thought of future tax increases on hard pressed motorists, will result in a Drivers Rebellion. Well done Chancellor, that, for the moment is postponed.”

One group who were clearly delighted by today’s announcement pledging a £2.5 billion fund to fill 50 million potholes across the country before the end of the current parliament was, unsurprisingly, the people who work in the highway repair industry, one of whom, Harry Peal, CEO of Roadmender Asphalt, observed:

"The budget lays out an exciting programme for levelling up Britain's businesses and infrastructure. The pothole fund offers a fantastic opportunity to implement new technologies that allow us to repair roads far quicker than before. This will reduce the time of disruption for road users, as well as proving to be the cheaper and move environmentally friendly option.

”[Our product] Elastomac will dovetail with the government's programme and help fill in the 50 million potholes within 5 years. This is a very exciting period of change and we look forward to working with local councils to realise this ambitious project."