A review of how industry bodies have reacted to George Osborne's Spending Review: once again, the Chancellor has failed to address urgentA review of how industry bodies have reacted to George Osborne’s Spending Review.

RHA: OMISSION OF FUNDING FROM CHANCELLOR’S STATEMENT THREATENS TO ‘PUT THE BRAKES ON THE ECONOMIC RECOVERY

A review of how industry bodies have reacted to George Osborne's Spending Review: once again, the Chancellor has failed to address urgentThe Road Haulage Association (RHA) is extremely disappointed that, once again, the Chancellor has failed to address the urgent need for £150 million to fund truck driver training and considers the omission to be a threat to economic recovery.

RHA chief executive Richard Burnett (RHARichardB) said: “Our industry is suffering a chronic shortage of 45,000-50,000 drivers. This is jeopardising supply chains and threatens to put the brakes on the economic recovery. This crisis will only get worse as 1 in 5 five of the current HGV workforce will reach retirement age in the next 10 years.

A review of how industry bodies have reacted to George Osborne's Spending Review: once again, the Chancellor has failed to address urgent
Richard Burnett
RHA Chief Executive

“We are doubly disappointed as we have figures that clearly show the £150 million would be more than recouped through taxes paid by the new drivers. The new driving jobs created by this funding would generate additional income tax, National Insurance, and up to an extra £275 million in fuel duty revenue due to the extra truck miles driven. In addition, the extra investment in UK skills would reduce the industry’s reliance on drivers from abroad, which the RHA estimates leads to approximately £180 million per annum being sent back to drivers’ home countries. This is money that would otherwise be spent in the UK, supporting employment, generating VAT and boosting UK growth.”

“The Chancellor holds the future of the industry in his hands. By supplying £150 million of funding for driver training he can kick-start a swift and effective reversal in the rapid decline of the this essential service industry’s vital skills base.

“Despite the news that no funding is to be made available today, we shall continue to press our case until a satisfactory outcome is reached. We will continue to step up our lobbying in the weeks ahead. For UK hauliers and for the entire UK economy, time is running out.”

In addition, the RHA notes confirmation of an apprenticeship levy rate of 0.5 per cent. Richard Burnett continued: “At present, this industry has no apprenticeship for lorry drivers, the main employment category for transport firms. A third Trailblazer bid is under consideration by the Business Department.

“It is essential that we get a driver apprenticeship, otherwise the levy is it simply a tax on payroll. An apprenticeship without funding for the core element of training ahead of the HGV driving test would be largely meaningless. That is what would happen under current Business Department policy – a policy that makes no sense.”

“Training for the test lies at the core of any haulage driver apprenticeship and sets the quality platform for the apprenticeship as a whole and the RHA is calling on skills minister Nick Boles to accept that truth and to scrap the opposition to funding driver training.”

FTA WELCOMES OPERATION STACK FUNDING BUT SAYS TRANSPORT CUTS PUT VITAL SPENDING AT RISK

A review of how industry bodies have reacted to George Osborne's Spending Review: once again, the Chancellor has failed to address urgentThe Freight Transport Association (FTA) says the Chancellor’s announcement of a quarter of a billion pounds of funding for new facilities in Kent to solve problems caused by Operation Stack is good news for the logistics industry.

However, the 37% cut in the Department for Transport’s (DfT) resource budget in Chancellor George Osborne’s Autumn Statement and Spending Review could threaten vital areas of spending.

The Operation Stack funding includes up to £250 million for a major new permanent lorry park to take the pressure off Kent’s roads. Currently thousands of trucks are parked on stretches of the M20 during disruptions to Channel crossings. The Government will consult on a preferred site at Stanford and other alternatives in the near future.

Mr Osborne told the House: “Having met with my Honourable Friend for Folkestone and other Kent MPs, I will relieve the pressure on roads in Kent from Operation Stack with a new quarter of a billion pound investment in facilities there.”

A review of how industry bodies have reacted to George Osborne's Spending Review: once again, the Chancellor has failed to address urgent
Karen Dee,
FTA’s Director of Policy

Karen Dee, FTA’s Director of Policy, said: “We are delighted that the Chancellor has recognised the devastating impact of Operation Stack on the logistics industry and its customers and we look forward to developing a permanent solution with purpose-built facilities for drivers.”

Ms Dee said FTA also welcomed the Government’s focus on investing in key transport infrastructure projects – both strategic roads and rail – and his recognition that maintenance is also important. He announced a ‘pothole fund’ – £250 million over the next five years to tackle the holes that blight our local roads, on top of nearly £5 billion of funding for roads maintenance, a £300 million increase compared to the previous Parliament.

But Miss Dee said the 37% cut in the DfT’s resource budget was “very significant” and would undoubtedly put at risk some important areas of spending such as the Mode Shift Revenue Support Grant, which helps to encourage freight onto rail, and spending on enforcement activities. FTA will be encouraging the Department to ensure these vital areas of spend are protected when it takes decisions on allocating its smaller budget.

Opportunity missed by Chancellor

In its submission ahead of the 2015 Statement – FTA had called on Mr Osborne for a 3p per litre reduction in fuel duty to ease cost pressures on domestic road freight, stimulate growth and create jobs. However, within his announcement the Chancellor neglected to acknowledge the importance of the reduction.

In response to George Osborne’s announcement – Karen Dee, FTA’s Director of Policy, said:

“The lack of recognition of the importance of reducing fuel duty is a missed opportunity by the Government in the Autumn Statement today.  The 3p per litre reduction would have provided much needed economic relief – not only to the logistics sector, which faces continuing difficult trading conditions, but also to the wider motoring public who rely on their cars to get to and from work.”

A review of how industry bodies have reacted to George Osborne's Spending Review: once again, the Chancellor has failed to address urgentA study part-funded by FTA and published by the Centre for Economic and Business Research (CEBR) confirmed that low forecourt prices raised UK GDP by 0.6%, stimulated an extra £11.6 billion of economic activity, created 121,000 jobs and boosted government tax revenues in 2015.

FTA, which represents 15,000 members in the logistics sector, sent its submission to Mr Osborne earlier this month together with a letter from Chief Executive David Wells highlighting three key issues for the industry – skills shortage, fuel duty and infrastructure investment.

BVRLA REACTION TO AUTUMN STATEMENT AND SPENDING REVIEW

BVRLA

The BVRLA has criticised Chancellor George Osborne’s attack on company car drivers in the Autumn Statement, and raised its concerns over the budget cuts announced in the Spending Review.

“We’re disappointed with the Chancellor’s decision to defer the removal of the 3 per cent diesel supplement on benefit in kind tax bands,” BVRLA Chief Executive Gerry Keaney said. “This move will penalise company car drivers for decisions they have already made, based on the Chancellor’s 2012 announcement that the supplement would be lifted in 2016. What is especially frustrating is that many of these motorists are being penalised for driving some of the latest, safest, most fuel-efficient vehicles on UK roads.”

A review of how industry bodies have reacted to George Osborne's Spending Review: once again, the Chancellor has failed to address urgent
Gerry Keaney
BVRLA Chief Executive

The BVRLA is also concerned that a 37% budget reduction for the Department for Transport (DfT) will result in costs being transferred onto the fleet sector. “What will the DfT have to stop doing to achieve these savings?” Keaney asked. “While we welcome the announcement that companies will benefit from more efficient digital systems, the government must not compromise on the quality or delivery of these services to save money.”

The BVRLA welcomed the extra money that was announced for the Transport System Catapult, as this will support innovation in Intelligent Mobility technologies and business models. Commenting on the announcement, Keaney said: “We now eagerly await news on how the government will continue to support Ultra Low Emission Vehicles – we are particularly keen to hear about the future of the Plug-In Car Grant.”

Elsewhere, there was good news for the car rental industry as the government promised to increase support to tourism by creating a new £40 million Discover England Fund to boost tourism across England.

The BVRLA will continue to engage with all relevant Government departments and work to ensure its members’ needs are considered going forward.

SMMT STATEMENT IN RESPONSE TO THE 2015 SPENDING REVIEW

A review of how industry bodies have reacted to George Osborne's Spending Review: once again, the Chancellor has failed to address urgent“Government engagement with industry has been fundamental to the recent success and global competitiveness of UK automotive, so today’s commitment by the Chancellor to a long-term industrial strategy for the sector is encouraging. More specifically, we were pleased to see the Chancellor heed SMMT’s call for increased investment in Catapult Centres and the extension of funding for the Advanced Propulsion Centre (APC) – both of which are vital to securing the UK’s position as a global centre of excellence for innovation. Meanwhile, the renewed support for ultra low emission vehicles (ULEVs) will help maintain the UK’s position as Europe’s fastest growing market for these new technologies.”