The Chartered Institute of Logistics and Transport UK’s (CILT(UK)) Public Policy Committee Chair, Sue Terpilowski OBE has shared commentary following Chancellor Rachel Reeves’ Autumn Budget announcement.
Sue Terpilowski OBE, CILT(UK) Public Policy Committee Chair said: “Since before the election we heard multiple promises about how things were going to be improved if there were to be a change in government. Since the election, the nation sat waiting for the budget to see how that would be delivered and more importantly what it would cost.
“As is customary, new Secretaries of State and Ministers have been doing the rounds since being appointed and delivering reassurances at event’s they’ve attended that things will improve.
“Transport and everyone that uses it is already facing huge pressure, rail fares are rising 4.6% despite the network still not fully recovering to pre-covid levels as people adapt to hybridised ways of working. This is also in the wake of passenger train drivers being promised a 15% pay deal over three years, alongside all passenger franchise operators eventually coming under government ownership. Add into that the start-up costs for GB Railways and already the DfT is going to have look carefully to balance the books.
“On regional levels, more money has been pledged to support local bus services, Louise Haigh the Transport Secretary devoted a large part of her conference speech to her support of buses. But fares are rising there too with the bus cap rising from £2 to £3. It is a widely acknowledged fact that buses are most used by those with less money who rely on cheap and economical transport. This rise has already attracted a lot of concern.
“Regionally, London is the biggest problem. The Mayor of London and Chair of TfL, Sadiq Khan probably thought he was going to get a much better deal especially as TfL teetered closely on the precipice of bankruptcy during the pandemic, finally securing a series of eleventh-hour bail outs.
“The Mayor will be sitting down with the Board to discuss next year’s fare prices, which traditionally come into force on 2 January, he has already been told as announced in the budget that he must put fares up by 4.6%. Last year he juggled City Hall’s budget to plug the gap, but with unions demanding more money, a bill for new trains on the Piccadilly line, TfL will find it hard to balance it’s already well-stretched books.
“One of the biggest lost opportunities in the budget was the continuation of the freeze on fuel duty and the lack of any moves towards road pricing. The government should have signalled an intention to maintain the same total of tax revenue from road users but replacing fuel duty with a fairer, more efficient system that also makes better use of our road network, reducing congestion and supporting the transition to net zero.
“The freeze on fuel duty also reduces the incentives to encourage the move of freight from road onto rail (a significant part of Labour's rail policy). Under this budget the incentives for green transport and a move across to public, as opposed to private, transport are becoming rather difficult to find.
“Then we move to international travel and trade, shipping we have been told in speeches at the launch of London International Shipping Week and the UK Chamber of Shipping Conference ‘is at the heart of this government,’ but with such pressure on the DfT to address all the above, times are going to be hard and that means in real terms, a cut in what’s possible to deliver.
“There has been no commitments made to ensure the future of the Clean Maritime Demonstration Competition, something which previous budgets specifically picked out to award funding for. Will this also signal a curtailment or restructuring of other projects and commitments made across the spectrum?
“There was no mention of significant new infrastructure investment outside HS2 which will now go to Euston (the Transpennine Route Upgrade being an existing project), so whilst some small projects have already been announced, such as improving the M11, the long awaited Lower Thames Crossing which would benefit the largest UK port area of the Port of London gets no mention and the dualling of the A1 between NE England and Scotland has been scrapped.
“Ports infrastructure which is critical to move trade in and out of the country didn’t get so much of a mention, despite a new trade policy.
“Furthermore the changes in Air Passenger Duty will directly affect the aviation sector. Changes had already been announced for 2025, so the budget was for further changes in 2026. The rates are already among the highest in Europe and from 2026 economy class flights to Europe (the largest number of passengers) will pay £15, up from £13, making it more expensive for people to take their annual holiday and for visiting friends and relatives. Given the relatively low elasticity, demand is unlikely to be significantly affected, so the rises will increase the total tax take. It would have been more helpful if some of the APD revenue is directed towards measures to achieve net zero, such as Sustainable Aviation Fuel, Zero Emission Aircraft development and Carbon Capture.
“Across every transport mode in the UK, Chief Executives and Civil Servants alike, will all anxiously be awaiting the final figures to be announced as what is actually available and how their own area of transport will benefit from state support.
“The latest message is that the government expects to attract and invest rather than borrow, the investment summit a few weeks ago was a glitzy showcase of global investors all with cash ready to invest in the UK. However, with a payback period often being long in arriving, investment in transport isn't always the top choice for investors.
“The DfT’s own growth rate is negative between 2023-24 and 2025-26 due to the reduction to the rail services subsidy.
“Transport hasn’t fared well in this budget with the fare payer and service operator facing the very real reality of that.”