Spring Budget – industry reacts to fuel duty freeze

Perhaps of most note to the bus and coach industry in today’s Spring Budget is the continued freeze on fuel duty. The announcement has gained some support and some criticism.

The government has decided to continue the freeze on fuel duty and maintain the 5p-cut for a further 12 months. All planned increases to fuel duty in line with RPI have been cancelled since 2011, with an additional 5p cut in place since Spring 2022.

Trade body RHA has welcomed the move, which it says will help firms deal with economic challenges.

The RHA also says the decision to extend full expensing to leased vehicles and assets should prove a significant support to coach operators, particularly those affected by higher interest rates. “We are delighted the Chancellor has listened to our calls to extend this opportunity to more commercial vehicle operators,” said the RHA.

However, the RHA has expressed disappointment that the Chancellor ‘missed the opportunity to provide direct short-term support for operators’. The trade body notes many operators were hoping for incentives for the take up of alternative fuels which can drastically reduce tailpipe emissions.

The RHA’s statement said: “We welcome the increase in the VAT registration threshold from £85,000 to £90,000 and the extension of the Growth Guarantee Scheme until March 2026 as measures to support small and medium-sized businesses.”

Lost revenue

The fuel duty freeze met criticism from the Campaign for Better Transport. The campaign group said the freeze leads to £4.2bn in revenue being lost.

Paul Tuohy CEO of Campaign for Better Transport, said: “Together this revenue would be enough to triple support for bus services across England and freeze rail fares for more than three years, positively impacting millions of public transport users and driving economic growth.

“Instead, the Government continues with retrograde measures that will do nothing to help those who have seen their bus services disappear, their rail fares rise and congestion blight their communities. It’s about time the Treasury reconsidered its priorities when it comes to transport.”

“The cut in national insurance will save the average coach driver around £400 a year” – Phil Hitchen, managing director of Stockport-based Belle Vue Manchester

View from Belle Vue

Phil Hitchen, managing director of Stockport-based Belle Vue Manchester, said: “There were no major surprises in the Budget.

“The cut in national insurance will save the average coach driver around £400 a year, while for small businesses and start-ups in our sector the VAT threshold increase is an advantage, but only to operators who use smaller minibuses, as coach hire is zero-rated.

“The new earnings threshold for child benefit is a bonus to some people.

“I can appreciate how some of the opposition see the Budget as ‘more and more’ for ‘less and less’.

“Overall, in my view, it was not a particularly exciting announcement.”

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