Business group Logistics UK has welcomed the Spending Review in principle, but warns that the government’s ambitious plans for growth will only succeed if logistics is placed at the heart of forthcoming Industrial, Trade and Infrastructure Strategies.
Kevin Green, Policy Director at Logistics UK, emphasised the essential role the sector plays in the functioning of the economy, stating: “Nothing, including the economy, moves without logistics.
"It underpins every sector that our communities and businesses rely on, every day – from keeping the shelves stocked to managing supply chains. It is what turns building sites into houses, houses into homes and homes into communities where people can live and work.”
The Spending Review outlines increased investment across key sectors such as transport, power generation, defence, healthcare and housing, including a 3.9% rise in transport capital investment over the review period.
However, Logistics UK is urging the government to ensure the logistics sector is both supported and enabled to deliver the infrastructure and services needed to realise these plans.
“To turn these pledges into economic growth, it is vital that the government prioritises the logistics sector,” Mr Green continued.
“That means providing the infrastructure our sector needs to move goods efficiently and enabling us to support the country’s renewal, as outlined by the Chancellor.
"It is why 30 Chief Executives of some of the UK’s biggest businesses recently wrote to Jonathan Reynolds, requesting that logistics is included as a foundational sector in the forthcoming Industrial Strategy.”
At the same time, the organisation warns against placing further tax burdens on logistics firms, particularly small and medium-sized enterprises (SMEs), which are already facing steep increases in staffing costs.
“While we welcome the Spending Review in principle, we, along with our members, are making clear to the Chancellor that this investment cannot be funded by higher taxation on hard-pressed businesses,” said Mr Green.
“Increases in employers’ National Insurance Contributions are costing our sector an estimated £1.7 billion, and our members simply cannot afford any more – whether this is through fuel duty or other business taxes.
"It is SMEs that power the UK economy and they will be forced to pass on any cost increases which will drive inflation and hamper growth.”