2020 BUDGET AND THE TRANSPORT INDUSTRY
16th March 2020
Last week, Chancellor of the Exchequer Rishi Sunak delivered the UK’s 2020 Budget in Parliament. The two biggest things to be aware of going into 2020 in relation to the transport industry are investments into UK road surfaces and a continued freeze on fuel duty.
Considerable investment into road standards is high on the agenda - welcome news for motorists around the country. The following five years will see the largest ever investment in England’s strategic road network, with a £27 billion fund being spent between 2020 and 2025. The fund will partially be used for a series of major projects including as expansion of the A303 to Stonehenge, development of the Lower Thames Crossing and A46 Newark Bypass.
Of this £27 billion, £2.5bn will be made available to tackle potholes and resurface roads. All road users will be pleased with the funding for more than 4,000 miles of road. 2017-2018 saw a year-on-year increase of 46% in the number of reported potholes to 15,542. The budget states that there will be enough funding to fill in around 50 million potholes across the country, which is certainly positive for drivers in our industry.
More positive news – the freeze on fuel duty will continue for another year, meaning that it will not rise in line with inflation, and continues at the rate of 57.95p per litre for petrol and diesel. This will be the 10th year running of the fuel duty freeze, which began in March 2011. To support the haulage sector, the Government has also stated that it will freeze HGV VED and the HGV Road User Levy for 2020-21.
Other things to be aware of include the plastic packaging tax and changes to red diesel tax relief.
To improve waste management and reduce plastic pollution, Rishi Sunak announced the government’s intention to introduce a Plastic Packaging Tax from April 2022. The tax will apply to plastic packaging manufactured in or imported into the UK containing less than 30% recycled plastic. In instances where less than 30% recycled is used there will be a tax of £200 per tonne. If you’d like to have your say on the tax policy you can, as the government have opened a ten-week consultation on the subject, closing on 20th May.
Tax relief on red diesel will be ending as of April 2022 for most sectors aside from in agriculture, fish farming, rail and for non-commercial heating to encourage businesses and industry to improve the energy efficiency of their vehicles.
RHA chief executive Richard Burnett said that the announcement of tax relief on red diesel being abolished will come as a blow to operators of refrigerated trailers as they’re the ones responsible for the movement of millions of tonnes of produce each year, both within the UK and around Europe.
He added: “The Chancellor’s claim that this will not take effect for two years ‘giving businesses time to prepare’ is helpful, but does not take account of the possibilities to use low emission or low carbon fuels. We shall be working with the Government and the sector to explore alternatives that support environmental objectives and the supply chain.”
Budget updates and responses can be found here: