UK 2020 Budget Impact of Logistics

On Wednesday 11th March the new Chancellor of the Exchequer, Rishi Sunak, the man who controls the UK purse strings , gave his first budget. This sets out his plans for the UK’s coming financial year and beyond. Unusually for a conservative government it was very big spending one. In fact one of the biggest for any Conservative party budget in the past thirty years. While there was a considerable amount give to the NHS to assist with handling the Coronavirus, there was additionally some significant sums of money going into infrastructure projects which will directly impact the UK logistics sector.

• For the 10th year in succession fuel duty to be frozen
• Red diesel subsidies which is used in non-road vehicles will be scrapped for most sectors by 2022.
• More than £600bn is set to be spent on roads, rail, broadband and housing by the middle of 2025
• £2.5bn will be available to fix potholes and resurface roads in England over five years
• There will be £27bn for motorways and other arterial roads

The freezing of fuel duty once again will certainly be appreciated by road hauliers across the country, it is the changes to red diesel which is going to cause some concern in the transport industry. While the rail industry is excluded from the proposals, it is going to appear to have an impact on reefer operators as they will now have to use standard diesel and this is going to have large cost impact on operating these type of containers and trailers.

The money made available for fixing potholes which is problem which appears to be getting worse is a significant investment and will hopefully help get the issue under control. The vehicle operators will especially welcome this as they are constantly incurring repair costs due to the increased wear and tear caused by potholes. However it would be useful if the councils where able to make more effort in ensure that road contractors when the conduct road works,  put the road back in durable condition and not start falling apart after 6 months of traffic.

All the £600 billion infrastructure projects have not yet been announce. However probably the biggest will be the HS2 Railway Line which comes in at £100 billion at current costings. Once completed it should free up the congested southern section of the West Coast Mainline Railway and allow for more general freight services. The £27 billon of new roads mentioned is part of the the previously mentioned figure. Apparently this will included a new tunnel for the long discussed A303 near Stonehenge which will certainly help road hauliers in this region once completed. It will hopefully mean that the City of Lincoln will finally get its badly needed ring road completed. The council is awaiting approval for financing for the final section. Once completed it will have taken over 70 years from planning to completion. The irony is that the road will probably be operating at capacity almost straight away so the council will have to apply for further funds to increase capacity. Hauliers in the area will be no doubt be pleased when it is finally completed.  Trucks who go East to West and no longer have to trek around the busy northern half to get to the other side and going North to South no longer means passing through the city centre.