The industry will closely watch Chancellor Rachel Reeves’ budget on 30 October. Mood music is that she will ‘kitchen sink’ bad news, with the necessary groundwork for that already in hand.
Of great relevance will be her handling of the 5ppl temporary fuel duty cut that is set to expire after the current financial year. Mainstream sources suggest that it will indeed be allowed to lapse.
While it has always been temporary relief, ending the measure will impact fuel bills. Diesel prices have stabilised of late, but the trajectory of other costs is no secret. Whether Ms Reeves will terminate the separate fuel duty freeze at the same time is doubtful, but if a new government is to make unpopular decisions, now – theoretically – is the time.
Increasing the industry’s tax contribution by ending the 5ppl cut will not be popular. Ms Reeves can mitigate that by allocating the additional revenue that the sector would pay to measures that feed into long-term policy.
For bus, funding certainty and acceleration of journey times are key. Both need pounds, shillings and pence.
For coach, options are greater. The mode remains stuck outside any decarbonisation support in England and Wales, while squaring the circles of PSVAR and accessible information regulations would greatly benefit from modest grant support if rail replacement is not to be decimated. Coach parking also needs a close look.
Will Ms Reeves end the temporary fuel duty cut? It seems likely. But if so, she must ensure that any greater industry tax contribution is spent on fostering its growth. Virtuous circle, innit?
