News of the Week: Transport leaders respond to the Autumn Statement
Every week we look at the top news affecting leaders within the industries we operate in. Not only is this week focussed on the transport and logistics industry, we're also taking a special look at the Autumn Statement and the reaction from industry leaders on what the proposed developments could mean for them.
Delivering his first Autumn Statement as chancellor, Philip Hammond announced the package for transport includes £1.1 billion in funding to improve local roads and transport networks, £220 million to fix congestion at key strategic road pinch points and a £390 million investment in future transport technologies such as ultra-low emission and connected and autonomous vehicles.
While this investment looks positive, industry insiders and observers have expressed a mixed reaction to the news. Chief executive for the Campaign for Better Transport Stephen Joseph praised plans for the east-west rail linking Oxford and Cambridge, but said the government is “still wasting too much on big road building schemes”. He added: “Schemes such as the Oxford-Cambridge Expressway and dualling the A66 across the Pennines will only increase traffic – what's needed is more support for alternatives to driving, including rail and bus infrastructure.”
On the contrary, Matt Dyer, managing director of Leaseplan praised schemes such as the new links between Oxford and Cambridge. He points out that the decision to back a third runway at Heathrow means the government needs get the economy “match fit” and that this investment ensures a better-connected infrastructure to suit people and businesses. Dyer said: “The vehicle and leasing industry contributes £24.9 billion a year to the UK economy and in 2015 the leasing industry accounted for half the number of new cars registered on the road. So this news will be especially pleasing for businesses, whose roads have suffered from poor organisation, congestion and pitted surfaces for decades. These roads are vital for the businesses that will power the country through years of lower-than-expected growth, so it is reassuring that the UK Government now views this as a priority.”
Some questioned the amount of investment being made, highlighting it was lean compared to other parts of the world. Richard Threlfall, head of infrastructure at KPMG UK, commented: “The continued focus on economic infrastructure in isolation, ignoring both social infrastructure and housing, is another missed opportunity to grasp the bigger picture. Overall, the UK spends about 2.7% of GDP on infrastructure today. Canada spends more than 4% and China at least double that.”
Fuel duty freeze
It was the freezing of fuel duty that managing director of Duff & Phelps Phil Dakin picked up on, expressing its significance to those in the transport and logistics industry, which are “experiencing pressure from rising oil prices and currency fluctuations”. He commented further: “Fuel duty is widely condemned as having a disproportionate impact in the cost of petrol and even following today's announcement, the UK has one of the highest levels of taxation when it comes to fuel, which it can be argued results in stymied economic growth through lost investment and expansion by corporates.”
Dakin wasn't the only one to express his thoughts on the fuel duty freeze, with Brian Madderson, chairman of the Petrol Retailers Association commenting that this year's freeze in duty “boosted GDP by 0.57%, generated 112,000 new jobs and put £5.3 billion back into hard-working Brits consumer spending”. However, Madderson believes more could be done, stating: “Trend volume sales in diesel have delivered a tax windfall to the Treasury of £1 billion and we will be looking to persuade the Chancellor to deliver an actual fuel duty cut in the Spring 2017 Budget.”
Amongst all of the excitement for the government's grand plans, infrastructure partner at law firm Clyde & Co Liz Jenkins warned: “A pipeline of projects is just a pipe dream until construction takes place. The government needs to speed up decision-making if it is serious about driving forward the UK's infrastructure.”
We want to hear from other transport leaders and get their thoughts on the Autumn Statement and what the investment plans and fuel duty freeze could mean for your business. Stay tuned to our blog and social media channels for our regular news updates covering a wide range of industries. If you have any questions or want to find out more about us, please don’t hesitate to get in touch with a member of the Lightbulb Leadership Solutions team today.