News / UK's 'modest' budget pledges fall short of boosting haulage industry

19/03/2015

The UK freight industry has given a mixed reaction to yesterday’s Budget, in which the government finally began to specifically address the driver shortage crisis afflicting the haulage sector, while also maintaining the tax rates on diesel.

Chancellor of the Exchequer George Osborne said the government would review the speed with which HGV licenses and driver medical assessments are issued and “will consider options to accelerate both in order to help address the shortage of qualified HGV drivers”.

Mr Osborne added: “The government will also work with road haulage firms on an industry-led solution to the driver shortage, including looking at the right level of access to, and funding support for, training.”

However, the lack of a commitment to directly fund training programmes disappointed the Road Haulage Association (RHA), which claims the industry is currently short of 45,000 drivers.

“The Chancellor’s rejection at this stage of our call to support the cost of getting UK residents licenced and qualified to drive heavy goods vehicles is a poor one for the economy, for tax receipts and for the industry. But we note his commitment to finding an industry-led solution with the right level of funding support and we look forward to further discussions.”

RHA chief executive Richard Burnett added: “We have put forward a strong, clear argument for why funding is necessary and appropriate. Our lobby for funding support will be even stronger in the coming weeks.”

However, Justin Zatouroff, KPMG’s global head of post and express, warned that the problem has much deeper roots than a lack of cash.

“The government [seeking] an industry-led solution to the driver shortage will be well received. Looking at … access to, and funding support for training is good for all, but will take time to change a long term problem given the average age of HGV drivers is so high,” he said.

The Freight Transport Association (FTA), meanwhile claimed that the shortfall could be as high as 60,000, while new figures from the Office of National Statistics yesterday showed a 56% decline in the number of HGV drivers on benefits.

ONS Labour Market Statistics reported that 1,345 HGV drivers claimed Jobseekers Allowance in February 2015, down 56.6% on the 3,100 claimants in February 2014.

FTA managing director of policy and communications James Hookham said: “Although this may appear on the face of it to be good news, the reduction in the number of professional drivers seeking work is compounding the current driver shortage between 50,000 and 60,000 HGV drivers and means that companies will have to work harder to find drivers, driving up pay as a result.

“But solving this in the longer term means attracting more young people to the industry. The cost of acquiring the necessary licence (£3000) acts as a major barrier to many young people and we are pleased that George Osborne will work with industry to ensure funding can be provided to overcome this problem,” he continued.

Both the RHA and FTA also expressed disappointment that rather than actually reducing fuel duties, the government had continued the freeze – it was expected to rise by 0.45p per litre in September.

“We note the continued freeze on fuel duty which was expected. Had he reduced duty (as he did with alcohol) he would have boosted growth and employment,” Mr Burnett said, while the FTA argued the Chancellor should have reduced fuel duty by 3p per litre.

British International Freight Association director general Robert Keen said: “This is the fourth postponement of fuel duty increases in two years, but it doesn’t mean that we will stop asking for an outright cut, the introduction of an essential user rebate and some form of fuel duty stabilisation mechanism.”

However, Mr Keen also said the doubling of funds to £15m for UK Trade and Investment activities in China and a series of trade missions with a focus on regional strengths was welcome.

“While the announcement was fairly modest, if it helps to get more people exporting, that will be good news for BIFA members, which facilitate the delivery of those exports,” he said.