Where’s the money going?

Chancellor of the Exchequer, Phillip Hammond MP, has delivered the country’s final Spring Budget.

Although there was nothing in the Spring Budget announcement directly relating to the bus and coach industry, there was still plenty of interest, including significant investment in roads with more money to help cut congestion.

Underpinning the Budget are forecasts by the Office for Budget Responsibility (OBR) that Consumer Price Index (CPI) inflation is to peak at 2.4% this year and that economic growth will be higher than expected in 2017, 2% rather than 1.4%.

It was announced that no company losing small business rate relief will see its bill increase next year by over £50 a month. National Insurance contributions will rise for the self-employed by 1% to 10% from April next year. It will then rise again to 11% in 2019.

Local authorities will be able to compete for a share of the £690m fund announced to tackle urban congestion and to improve local transport networks. Investments are to be made in roads, with £90m for the north; £23m for the Midlands from a £220m fund that addresses pinch-points on the national road network. A further £270m will be made available to keep the UK at the forefront of disruptive technology including autonomous vehicles. Scotland, Wales and Northern Ireland will all receive additional funding.

The Government is to expand the current ‘extended rights’ entitlement for children aged 11 to 16 who receive free school meals or whose parents claim Maximum Working Tax Credit. They will now get free transport to attend the nearest selective school in their area. Fuel duty is to remain frozen and a review of taxation of diesel vehicles has been delayed until the autumn.

This was the last Budget statement to be delivered in the Spring. In the future, it will take the place of the current Autumn statement.


Commenting on the budget, Chief Executive of Greener Journeys, Claire Haigh, the sustainable transport campaigning group, said, ‘Congestion is strangling towns and cities across the UK, bringing urban centres to a standstill and costing the economy more than £13 billion each year. We are delighted the Chancellor has acknowledged the severity of this problem, and await with interest further details of the £690m fund to ease traffic on the worst pinch points in local transport networks. Investment in bus priority measures and bus infrastructure can ease congestion and reduce roadside emissions, delivering £7 of economic benefit for every £1 invested. The Department for Transport must ensure these funds are allocated to measures which make public transport a more convenient and appealing travel option for drivers.’

‘This funding is a step in the right direction. But if this Government is serious about tackling congestion, and confronting the emerging public health threat caused by roadside air pollution, it must have the courage to confront the root cause of the issue, rising car use. While fuel duty remains frozen and the cost of driving remains low, we can only expect traffic and pollution levels to get worse. Only by raising duty, and the cost of driving the dirtiest diesel vehicles, can we encourage people out of their cars and tackle the congestion and air quality problems once and for all.’

Referring to the £270m fund to keep the UK at the forefront of disruptive technologies like biotech, robotic systems and driverless cars, Head of Automotive at KPMG UK, John Leech, said, ‘The Chancellor’s announcement is a welcome boost for automotive companies and will benefit consumers. This investment will enable the UK to be an early adopter of shared-use driverless cars and Britain’s consumers will enjoy the largest cost savings in the world from this technology. The measures announced today by the Government will support the development of internationally competitive businesses in the rapidly evolving mobility ecosystem.’

SMMT Chief Executive, Mike Hawes, said, ‘The automotive industry is investing significantly in new technology to address the issue of air quality, so we look forward to working with government to encourage the uptake of the latest, low emission vehicles, regardless of fuel type. Measures to reduce congestion will help as will funding announcements for the design and development of battery technology. The UK is Europe’s number one electric vehicle market, but consistent and long term government support is essential if we are to retain this position.’

‘UK Automotive plays a critical role in the country’s economy but future success will depend upon maintaining competitiveness. It’s disappointing, therefore, that the Chancellor hasn’t prioritised additional funding for supply chain development, nor addressed the flaw in business rates that dis-incentivises investment in plants and machinery. On a more positive note, the focus on technical education is welcome, as we seek to fill the 5,000 vacancies that exist in our sector and invest in skills to improve productivity still further.’

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