On Wednesday the 3rd of March the Chancellor of the Exchequer, Rishi Sunak, presented his 2021 budget to parliament – and it’s safe to say there was a lot to take in. After a long hard year for many, businesses across the UK were keen to understand how this new budget would help us work towards a prosperous, post-COVID-19 professional environment. And whilst we may not have received all the answers, we certainly gained some valuable insight into what the year will hold.
At Forest Freight, we were determined to identify exactly how this budget announcement would affect the freight sector – both businesses and individual workers alike. So, to save you the trouble, here are our key findings!
Freeze in Fuel Duty
The budget announced that fuel duty will be frozen for the 11th consecutive year. Perhaps this might appear as one of the more minor details of the 2021 budget, but in our opinion, it will make a substantial difference to hauliers operating across the country.
To say that the economy is in a tumultuous place would be somewhat of an understatement, so this measure to keep additional charges to a minimum is something that will be very welcome to the sector – allowing businesses and freight providers alike to save on costs and put that money to good use elsewhere.
Extension of the Furlough Scheme
The furlough scheme has become a vital resource across numerous industries and it’s extension comes highly-praised and highly-welcome. The Chancellor has announced that the scheme will now run until the end of September. For freight providers who find themselves predominantly working with sectors such as retail or hospitality, this measure provides them with peace of mind as well as the ability to maintain their workforces until these industries can reopen.
Introduction of Freeport Facilities
The budget details that ‘new English Freeports will be based in East Midlands Airport, Felixstowe & Harwich, Humber, Liverpool City Region, Plymouth, Solent, Thames and Teesside and will be special economic zones with different rules to make it easier and cheaper to do business.’
Of course, we can’t know the true impact this will have on UK freight and UK business until the facilities come to fruition. What we do know, however, is what we’ve been told. These structures are said to come attached with numerous benefits – such as improved customs duties, business rates relief and simple planning requirements. But only time will tell!
What’s more, the introduction of these freeports could also see a boost in job vacancies – something that will prove beneficial for individuals across the country and not just freight forwarders alone!
Increased Incentive within Recruitment
Recruitment has been a rising issue within the freight industry with skill gaps becoming increasingly apparent and huge losses of EU workers. The impact of both Brexit and COVID-19 has caused the loss of many potential applicants and workers, leaving hauliers understaffed and overstressed. However, this could be set to change.
In the 2021’s budget, the Chancellor has pledged to increase the incentive for apprenticeship schemes. This will transpire by the government doubling the cash incentive given to firms who choose to take on an apprentice to a notable £3,000 payment per hire. Undoubtedly, this is a step in the right direction for the sector and sets us on the path to rebuilding a robust and capable workforce across the country.
However, Logistics UK notes that whilst this strategy is a welcome one ‘the industry needs new recruits now, and a more flexible method of providing direct support to those looking to retrain and reskill into vital operational roles like HGV drivers and transport managers would help that transition. ’ They further recognized that while the enhanced support for apprenticeship schemes is a positive step, the average cost for a 12-month training and license acquisition amounts to £7,000. It’s in this viewpoint that they ask the government to offer more immediate support – perhaps with the implementation of interest-free loans or grants – and allow UK hauliers to get back on their feet more quickly and efficiently.
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Of course, one thing is for sure. Without experienced hauliers on hand to help brands, businesses and large-scale organisations to deliver their goods and equipment, sectors such as retail and hospitality would be left in an unimaginable bind and could further damage the wider economy. So it only follows that the sector is given the support it needs to bounce back from this period of uncertainty.
If you’d like to learn more about how the 2021 budget will affect the freight industry, or if you’d like to enquire about our services, get in touch today!
