After the noise and the fury surrounding the 2025 Budget, hopefully we are now entering a period of greater policy calm after the storm!
When it came to it, there were few big surprises as so many elements had been well trailed already. But there are nevertheless some significant changes for road transport, although several relate only indirectly to the coach and bus sector.
The end (but not quite yet) of the fuel duty freeze was something that had to happen sooner rather than later. The Chancellor’s highly significant decision to open the door to a form of road use charging for electric and plug-in hybrid cars probably contributed to the move to end the freeze to make sure that the financial incentives to adopt cleaner, electric vehicles are not undermined.
It probably also sets a precedent for road use charging to be introduced for other categories of vehicles at some point in the not-too-distant future – something that the coach and bus sector should be mindful about and, perhaps, seek to get ahead of.
Unfortunately, coaches and buses will not be exempted from the fuel duty increases that will begin in September 2026 with reversal of the ‘temporary’ 5ppl discount in stages, followed by a rise in the duty level in line with inflation from April 2027.
The Confederation of Passenger Transport has proposed that because coaches and buses contribute only 6% of fuel duty receipts, exempting them from the duty increases would be a relatively low-cost measure. That could be a significant boost.
However, in the absence of such an exemption, the economic case for operators to switch to electric should become increasingly compelling as the cost of running an ICE vehicle rises and if, as expected, that of buying electric vehicles falls.
For electric cars, of course, there was additional funding to subsidise purchase costs and encourage sales as well as to improve the UK’s charging infrastructure.
While the Budget clearly signalled the government’s continued commitment to the electrification of road transport, there was nothing new to specifically support the coach and bus sector in its transition.
Improvements to the UK’s charging infrastructure should benefit other vehicle types – as well as cars, of course – although again there was little to acknowledge the growing requirements of these other vehicle types in the statement.
I was recently struck by coach industry leaders’ comments that motorway charging infrastructure for battery-electric HGVs should be developed with the needs of coach operators in mind.
There is clearly a danger that without proper attention, the needs of longer-distance coaches could be left out of the discussion, further delaying their efforts to decarbonise.
This is the kind of challenge that Zemo Partnership was established to tackle, and one of the issues that our cross-sectoral Public Mobility and Energy Infrastructure working groups will relish getting their teeth into. The transition that is now well underway requires us all to work with organisations and partners who were previously unfamiliar bedfellows.
Zemo’s working groups meet regularly and aim to encourage cross-sectoral collaboration, and so I would encourage coach industry participants (and others across the sector with challenges of this kind) to come and work with us.
This provides a platform and opportunities to bring these sorts of issues to our community that, also with links to government, can help to resolve them.
