We explore the 2024 Autumn Budget and the impact on the transport and logistics sector.
Chancellor Rachel Reeves delivered the Labour government’s Autumn Budget yesterday and it paints a mixed picture for the whole of industry, but in particular the transport and logistics sector will see both pressures and reliefs.
In an industry that operates on incredibly narrow margins, the freeze in fuel duty will provide some relief. The Budget announcement confirmed that the temporary 5p cut per litre will continue for one further year. The logistics sector supplies everything from schools to hospitals, factories to homes and the fuel represents a large portion of operating costs.
The flipside of the freeze on fuel duty is the decision to increase the minimum wage by 6.7% to £12.21 per hour and increase employers’ National Insurance contributions by 15%. The rise is one that will inevitably place pressure on businesses which are already up against it with small margins. However, small businesses will be supported with an increase in the Employment Allowance from £5,000 to £10,500 and removing the £100,000 threshold for all eligible employers.
The Industrial Strategy, delivered within the Budget, acknowledges the need to drive growth and support net zero. There was £975 million allocated to the aerospace sector over five years to fund research and development for technology. There was a £2 billion, allocation to support the automotive industry. The £2 billion commitment is important in supporting the growth of electric vehicles. The Government has also announced that it will publish a Trade Strategy in 2025 and this will renew the commitment to free and open trade, enhance economic security and net zero ambitions.
The mixed picture from the budget further reinforces the calls for a Logistics Minister within Parliament to drive change and growth within the sector.
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