The logistics industry needs government support in the 2021 Budget to ensure the continued health of the UK’s supply chain, according to business group Logistics UK. 

In a letter to Chancellor Rishi Sunak MP, sent ahead of the spring Budget, the organisation has urged government to implement a series of measures to strengthen the resilience of businesses charged with supplying the nation’s economy with everything it needs.  

In addition to holding fuel duties at present levels and incentivising low carbon alternatives, David Wells, Logistics UK’s Chief Executive has written to the Chancellor to urge him to facilitate access to employment within the sector through interest free loans or grants to aid training. According to Mr Wells, this would enable those seeking work to take advantage of opportunities in logistics, which is facing a shortage of skilled workers in operational roles such as HGV Drivers.

“Our sector supports every area of the UK’s economy, but has been struggling for some time to fill vacancies,” he says. “The loss of EU workers after Brexit has had a significant impact and our member organisations cannot find staff with the right skills, qualifications and experience. The Apprenticeships system is useful but cannot deliver at the scale or speed required and needs reform: the government has already pledged to test new working patterns for apprenticeships in the last Spending Review and now needs to accelerate this work. And with HGV Driver training typically costing around £7,000 per person, grants or interest-free loans should be provided to train and re-skill new employees, increasing the pool of available workers to fill the skills gaps in our sector.”

In his letter to the Chancellor, which has also been sent to representatives across business and industry in the House of Commons, Mr Wells also presses the importance of fuel duty to be held at present levels, together with added incentives to switch to alternative fuels, to aid an industry which has been hit hard by the economic downturn of the past year:

“Our members support moves to cleaner, lower carbon fuels but the industry needs time for any changes to be implemented. Fuel duty is a direct cost to business: we estimate that a one penny increase per litre of fuel would add £470 per annum to the cost of running one truck. And with current limited availability of alternatively fuelled vehicles meaning diesel is the only option for the majority, this would be a direct tax on our industry as it commits to deliver for Britain.

“At a time when our industry is still reeling from the impact of the economic downturn caused by COVID-19, increasing fuel duty would either reduce or eliminate business profit margins (already 2% or less in our sector) or be passed on to the customer, which in turn would increase the cost of doing business in the UK. In addition to freezing fuel duty for another year, a reduction in duty on alternative fuels would drive faster uptake for lower emission vehicles and help the industry switch away from diesel, thus furthering the government’s clean air agenda.”

Mr Wells’s letter concludes with a call for further infrastructure investment, designed to support transfer of freight between transport modes, as well as prioritising investment in a charging infrastructure which will help speed adoption of electric vehicles nationwide.

“Logistics businesses are committed to driving the UK out of the economic slump caused by COVID-19, but to ensure the continued health of our industry, and the businesses we serve, it is imperative that Mr Sunak provides more support for skills in this year’s Budget. This will enable a healthy logistics sector to keep the UK’s businesses supplied as the economy builds back better.”

Logistics UK

About the Author: John Loughran