Industry responds to 2021 Budget

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There has been mixed responses about the fuel duty freeze. RICHARD SHARMAN

Go-Ahead Group, CPT and the RHA have given their thoughts on budget changes announced last week

Following publication by HM Treasury of the Government’s 2021 Budget, organisations from across the industry have responded. Chancellor Rishi Sunak’s announcement included funding for the ongoing fight against Covid-19, to protect jobs and livelihoods, and to strengthen public finances. With no sector-specific funding forthcoming, what does it mean for the coach and bus industry?

Beginning April 2021, a new super-deduction will cut companies’ tax bills by 25p for every pound they invest in new equipment, which the Government said could be worth around £25 billion to UK companies over the two-year period the super-deduction will be in full effect, something which the Go-Ahead Group hopes to take advantage of. Katy Taylor, Chief Strategy and Customer Officer at The Go-Ahead Group, said: “We will be looking carefully at the Chancellor’s super-deduction scheme to understand if it will make it easier for the transport industry to invest in green technology – including electric buses, which are expensive upfront but deliver long-term returns in cleaner air and improved public health.

“We welcome the steps being taken to support struggling shops, pubs and restaurants on the high street. Policies to reduce emissions by encouraging people to leave their cars at home in favour of walking, cycling or public transport would have been welcome – including levies on workplace parking, a scrappage scheme for second cars or mobility credits.

“In the long term, rather than adjusting rates of fuel duty, it is surely time to consider a broader road pricing scheme which will encourage people to think harder about the social and environmental cost of private car usage.”

The CPT highlighted the lack of sector-specific help for the coach industry: “Coach operators have once again been left out in the cold by this government. The Chancellor has announced billions of pounds to help businesses across the country restart, including £5bn of further support for the retail, leisure, hospitality and tourism sectors but it inexplicably excludes coach operators.

“In 2019 over 23 million visits were made by coach worth £14bn to the UK economy. Today’s inexplicable omission will hamper the industry’s ability to kickstart UK tourism and help protect jobs and local economies across the country.”

Turning to the bus sector, the CPT continued: “Bus will be vital in the country’s Covid-19 economic recovery and drive towards net zero helping people get back to work and taking cars off our roads.

“Today was an opportunity for the Chancellor to ensure that sufficient funding is available, as hopefully restrictions end this summer, to enable the industry to deliver the services passengers will need as life returns to normal. It is disappointing this has not been taken.

“It is vital that the important funding that is currently in place to support the sector while passenger numbers are reduced is not at the expense of the services passengers will need in the future.”

On the decision to cancel the fuel duty rise, the CPT said that this encourages car use and does nothing to incentivise bus travel: “The decade long freeze in fuel duty has led to 200 million fewer bus journeys, an additional three million tonnes of CO2 being emitted and increased congestion which cost the UK economy nearly £7bn in 2019.

“By failing to end the fuel duty freeze today the Chancellor has put at risk the Prime Minister’s green recovery and missed the chance to take a bold step towards positioning the UK as a global climate leader in advance of the COP26 summit later this year.”

Commenting on the Budget announcement, RHA Chief Executive Richard Burnett took a different stance on the issue of fuel duty: “This has been a Budget that is good for business and good for people. The Chancellor’s announcement of a fuel duty freeze for the 11th year in succession comes as very good news for the hundreds of thousands of commercial vehicle operators who have been struggling as a result of the pandemic.

“During the first wave of the virus, 12 months ago, the RHA carried out an industry survey and was dismayed to learn that 50% of the UK’s commercial vehicle fleet was off the road. Today’s news will come as a shot in the arm, not only for hauliers but also coach operators, hit hard by cancellations, social distancing and reduced demand from schools and events.”

The RHA also welcomed the extension of the furlough scheme until the end of September. Richard concluded: “As with every Budget, it contains much more detail than first meets the eye but overall, we consider it to be a Budget based on optimism and right now, that’s something that we all need.”