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Budget 2016: retail operations & logistics reactions


Earlier today, the Chancellor of the Exchequer, George Osborne delivered his eighth Budget in the House of Commons.
Among the headline-grabbing sugar tax and changes to secondary schooling, there were a number of announcements affecting our sector. The following eDelivery readers share their views on the Budget 2016, but if you want to add your voice to conversation please leave a comment or send us an email.

Andrew Hill, commercial director at Electio:

“The Chancellor announced a huge tax cut for the oil and gas industry, with petroleum revenue tax due to be effectively abolished. It was also positive to hear that despite petrol prices plummeting, fuel duty will be frozen for the sixth year in a row, which goes against many of the predictions that appeared before the announcement, with many fearing fuel duty was set to rise. Osborne claimed this means a £75-a-year saving for the average driver, but will obviously mean a lot more to commercial road users.

“Ears also pricked up in the logistics industry when the chancellor announced that, by 2018, the crossing tolls on the Severn Bridge will be halved. A big boost for carriers using this major gateway to Wales every day!”

Mike Danby, CEO of Advanced Supply Chain:

“Congestion is crippling the industry and the economy, and ensuring we maintain and improve the current road network, as well as build new roads to increase overall capacity should be absolute imperatives for the Government. The infrastructure announcements in the Budget are a small step towards the so-called ‘Northern Powerhouse’, but road networks across the country need attention.

“Lower fuel duties drive the economy forwards, which leads to greater tax revenues. Increased petrol prices make it harder for a vast range of businesses to generate profits, as well as hitting family budgets. The move by the Chancellor to freeze fuel duty is welcomed, but more needs to be done to ensure the haulage industry can continue to be a driving force behind the economy.

“In addition, the Treasury’s revenues could be directed to driver training, in the form of grants. This would help businesses tackle the substantial driver shortages the haulage industry is struggling to cope with.”

Peter Ward, CEO of the United Kingdom Warehousing Association (UKWA):

“The Chancellor’s comments regarding the global economic outlook reinforce the fact, if indeed it needed reinforcing, that high professional standards, lean operations, innovation and a lot of hard work will remain fundamental requirements for companies operating in the 3PL sector.

“The decision to freeze fuel duty will be warmly welcomed by UKWA members. It will reduce the cost pressures on UK supply chains and, it is to be hoped, stimulate further growth in the nation’s economy.

“By taking this action Mr Osborne has gone some way towards levelling a playing field that many people believe has been tilted against British logistics firms who compete with European operators whose lorries arrive in Britain filled with enough cheap fuel for a week’s work.

“Mr Osborne’s ongoing commitment to investment in road building and other infrastructure projects is also pleasing.

“The country faces some serious choices on infrastructure spending in the coming years as the many and varied social changes that impact upon our traditional ways of life continue apace.

“Societal shifts will lead to inevitable growth in logistics activity and substantial investment on roads and other key infrastructure projects must be given priority. Mr Osborne appears to realise this.

“I am sure UKWA members will also be glad to see the headline rates of corporation tax continue to fall.”

David Jinks MILT, head of consumer research at ParcelHero:

“With the basic price of fuel being at an historic low, raising fuel duty might have seemed like quite a painless option for the Chancellor; but any increase would have been reflected in increased fuel surcharges by delivery companies, making the cost of delivering items more expensive and hitting SME traders hardest. It’s welcomes news this anticipated rise will not happen.

Congestion in the North of England increases delivery times and unnecessary emissions. So it’s welcome news that more than £230m has been earmarked for road improvements in the north of England, including upgrades to M62 and A66-A69. The new infrastructure improvements will help UK couriers speed up deliveries while further reducing the industries carbon footprint.”

A number of industry bodies also issued statements in the wake of the Budget, including the Association of Convenience Stores, whose CEO James Lowman, who welcomed news that the small business rate relief threshold will be raised to £15,000 rateable value from £6,000. “The increased small business rate relief threshold will be a welcome measure for thousands of local shops who are facing rising costs in other areas of their business. This measure will also significantly reduce the burden on the Valuation Office Agency, as more stores are taken out of paying rates altogether.”

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