Autumn Statement 2016 Analysis – Transport and Logistics

Following the Chancellor Philip Hammond’s first Autumn Statement, Andrew Cook – Partner and member of Menzies Transport and Logistics sector team – has reviewed the announcement in line with their impact upon the UK Transport and Logistics sector.

Investment in Road and Rail Infrastructure

Andrew Cook - Menzies AccountantDuring the week leading up to the Chancellor’s first (and last) Autumn Statement press releases had indicated that a primary focus of the government’s initial post-referendum response would be to increase infrastructure spending in an attempt to generate economic activity and enhance productivity.

Whilst understandably seeking to attract high-tech innovative businesses to operate in the UK was a high priority for this spending it was pleasing to see that the Chancellor has recognised that it is essential that the transport infrastructure is equally ‘fit for purpose’ and announced a number of transport specific measures, including:

  • £1.1bn extra investment in English local transport networks
  • £220m to reduce traffic pinch points
  • £110m for East West Rail and a commitment to deliver an Oxford to Cambridge Expressway to support the these innovation hubs.

Whilst the level of detail is light at the moment and figures relatively low particularly in the context of annual transport spend it is hoped that well targeted projects, particularly for the ‘traffic pinch points’ will achieve recognised benefits.

Future Transport Technology

In relation to high-tech innovation £390 million has been earmarked to support the development of future transport technology including the testing infrastructure for driverless cars, emission reduction for buses and taxis and widening the network of ultra-low emission charging points.

It would be expected that the government would seek to continue to introduce measures driving the low emission agenda. However it is disappointing that there were no reliefs or grants announced specifically targeted at supporting SME’s to encourage investment in energy saving and safety-enhancing technologies, making these more affordable.

Employment Status

Employment status has been in the headlines recently with some high profile cases involving Uber and various delivery services. The Chancellor re-affirmed his commitment to focus efforts on the abuse of employment structures designed to avoid paying employment taxes. This is to be welcomed by providing a fair playing field for all operators. It is hoped that this will be further supported resource to ensure effective enforcement including impounding vehicles and closing down operators who abuse the rules.


As widely anticipated, the proposed fuel duty rise has been cancelled for the 7th successive year. Whilst unlikely to mitigate the impact of recent increases in oil prices and the weakness of sterling, this is a welcome measure for the Transport and Logistics sector.

Other Changes

There are a number of other measures that were announced that will cause some concerns in an industry already running on tight margins.

It was widely anticipated that the National Living Wage would be increased and the move to £7.50 per hour from April mean increased costs of over £500 per full time worker. There are also small increases in employers national insurance with threshold changes.

Another rise in Insurance Premium Tax by 2% further increases largely fixed costs and whilst the Chancellor stated that these new level of 12% was lower than most European economies this tax will have double from 6% in 2015.


Whilst it is disappointing that the Autumn statement was low in SME specific incentives this is not unexpected since the Chancellor had to steer a firm course in outlining his fiscal and spending plans whilst faced with the economic uncertainties surrounding Brexit. It would have been good to have seen some specific measures encouraging employment in the Transport and Logistics sector and hopefully he has kept some dry powder for his next announcement in the Spring.

Find out more about the Menzies Transport & logistics business services.

Download Menzies full Autumn Statement Summary

Read Chancellor Philip Hammond’s Autumn Statement in full.

Get more input on the 2016 Autumn Statement implications for the Transport & logistics sector by speaking to our sector team.

Print Friendly, PDF & Email
Posted in Blog, Transport & logistics