What Does The 2018 Spring Statement Hold For Couriers? (And Who Will Be The Winners And The Losers?)
The Spring Statement (the Budget in old money) is always a time of concern for couriers given the possible changes in fuel duty, insurance premium tax and vehicle excise duty. This month’s statement could be more significant than most, however, as the chancellor looks to balance the needs of clean air with those of commercial vehicle drivers, and the rights of van drivers versus those of delivery company owners.
P. In this latest blog from Coversure Redditch, the courier insurance specialists, we’ll consider what might be in the chancellor’s red box this year and who will be the winners and losers in the delivery industry as a result.
Always a favourite target of the chancellor – especially ones seeking to raise money as this one is – it would be a brave man who would bet against a rise in fuel duty. This year more than ever, with so much pressure to clean up our air and get rid of diesel vans, it seems likely that a penny or two on the price of a litre will be levied. For private motorists this is an inconvenience, but for couriers and other professional drivers it’s a financial headache you can do without. The rise will probably be matched by further incentives to switch to a hybrid or even an electric van, but unless you are in the market for a new vehicle and are lucky enough to have plenty of charging points locally, then that’s not going to be much comfort to you.
Van And Courier Insurance Premiums
Like fuel costs, courier insurance cover is something that affects all drivers and there are two big things that could change here. The first is insurance premium tax (IPT). This has been a favourite target for successive chancellors and is one of those sneaky ‘stealth taxes’ that you only notice when your insurance premium goes up. Since 1997 the standard rate has risen from 4% to 12% and while a rise isn’t widely thought to be on the cards, who can tell?
The other, even less well-known influence on insurance policy costs is the Ogden Rate. Never heard of it? You’re in good company; until February 2017 most insurance professionals weren’t all that familiar with it either. Basically, it’s the method by which the level of compensation a person who suffers personal injury receives over their lifetime is calculated and in 2017 the rate was changed from 2.5% to -0.75%. This massive change worried insurers as they saw the amount of compensation they were liable to pay rise sharply, so they increased premiums to protect themselves and up went your quotes.
The change kicked up a massive storm and the government was forced into a partial U-turn, one that means the rate will be reviewed at least every three years and with a predicted rate rise to 0% – 1% as the investment risk is revised. It’s hoped that there will be an update on this and that courier insurance quotes will fall.
There’s been a huge amount of talk in the press of late about the so-called ‘gig economy’ and the status of drivers for firms such as Uber: Are they self-employed or are they employees? And if they are the latter are they entitled to full employee rights?
How you feel about this will largely depend on whether you’re a gigging driver – such as a lifestyle courier – or a company that uses casual drivers. In response to 2017’s Taylor Review the government promised an overhaul of employment rights to improve conditions for millions of workers, including the 99,000 courier drivers, in the gig economy. So far things have remained hazy though. Uber drivers are now considered to be workers, but Deliveroo riders are still classified as self-employed and that means they’re not eligible for the same rights. Some are speculating whether Philip Hammond will at least seek to clarify his colleague’s, Business Secretary Greg Clark’s, position on this. For many couriers a move to full rights would be a godsend, while many courier firm owners would view it as an unnecessary cost. Either way, the rules need to be clarified soon.
Diesels have had a tough old time over the last couple of years. The VW emissions scandal opened the floodgates on a whole sea of troubles for this industry-standard fuel and the government have been keen to punish drivers for following the advice they gave in the early 2000s when they promoted it as the green fuel with new vehicle excise duties coming into force in April.
Since then diesels have been blamed for polluting our air and driving up greenhouse gas levels, giving successive occupants of 11 Downing Street free reign when it comes to piling on the tax. Such has been the success of their efforts that the Society of Motor Manufacturers and Traders (SMMT) recently reported that CO2 emissions had risen for the first time in 10 years, in part as new diesel sales fell by 17% as people switched to less efficient petrol engines or held on to older, more polluting vehicles. Will this stop them putting a further squeeze on diesels and allowing cities such as London, Nottingham and Oxford from banning diesels from their city centres? It’s not very likely, alas…
Like Some Courier Insurance Help?
Well, we’ll just have to see what March 13th brings us all. If you would like to know more about courier insurance or would like some help getting the courier insurance that’s right for you, then please contact us by calling us on Redditch (01527) 757 585, email us by clicking here or request a no-obligation courier insurance quote here.