Last week’s Spring Budget saw the Chancellor, Jeremy Hunt unveiling plans to maintain the 5p cut in fuel duty for a further 12 months as inflation remains high – saving the average driver £100 next year. Whilst the freeze in fuel duty is a much-needed measure for tradespeople, Fix Radio reveals a landmark study analysing other obstacles the industry is facing – such as plans to increase the ULEZ to greater London and the ‘Transit Tax’.
News of the expansion to the ULEZ in London, which is due to be enforced from 29 August, has gathered pace from the construction industry with tradespeople looking to be amongst those worst hit. Research from the Federation of Master Builders has shown that increases to transportation costs, such as rising parking fees over the last 18 months have forced 80% of tradespeople to increase their prices. Now, it has been shown that the ULEZ expansion will have a direct and detrimental impact on close to a quarter of all construction businesses in Greater London, with another 21% saying that increased transportation costs has made travelling into cities with their van an impossibility, increasing to 23% in London.
The business landscape for sole traders and small businesses in the construction sector is one that is facing increasing turbulence after the lockdown boom just a few years ago. Fix Radio found that one in four businesses were on the cusp of collapse in 2022, with new research from the station now finding that almost a quarter of tradespeople have had to increase their prices as a result of inflation, but are ultimately losing work as a result.
Adding to these business woes, new plans to increase ULEZ in Greater London has heightened fears about the impact this will have on tradespeople who face a £12.50 daily fee for vehicles not meeting minimum requirements – this could be equivalent to more than £3,100 a year. Already suffering the results of this, Fix Radio unveiled 23% of tradespeople in Greater London said the introduction of ULEZ and the ‘Transit Tax’ where taxpayers are facing higher rates on vans for private use – has already had a detrimental impact on their business.
To combat increasing costs for tradespeople as a result of the ULEZ expansion, a £110m scrappage scheme will be launched to help fund the purchase of new vehicles that are ULEZ-compliant. Under the new scrappage fund, each applicant is entitled to £2,000 to help transition to a low-polluting or EV alternative. However, for tradespeople, this allocation covers a mere fraction of what would be required to swap their vehicle. With the EV equivalent of Britain’s best-selling van, the Ford Transit, starting at £48,000 for its most basic model, the provisions clearly do not go far enough. Even for those who could afford the significant outlay to purchase a new van, a report commissioned by Transport for London estimated that 30,000 non-compliant vans currently use the ULEZ expansion area every day, despite the fact there are only 23,803 vans that meet the new requirements for sale in the UK.
This concerning outlook comes on top of the fact that the cost of steep parking fee rises, and ‘green’ motoring charges forces builders, plumbers and electricians in London to spend £70 on average before they have even walked through the door, and a total of £140 a day including operating costs, according to Fix Radio research. With the average day rate of a tradesperson equalling £150 – according to Pier Consulting – the addition of the new ULEZ charges is now leaving tradespeople in London facing a loss of 21 workdays. For some tradespeople who have reported on Fix Radio that their daily costs have been as expensive as £300 to work in the capital, the situation is much bleaker.
Whilst the situation for tradespeople travelling to jobs is grim across the UK, the picture in London is particularly severe. The impact of the ULEZ expansion stands to undermine the Mayor of London’s plea for tradespeople to work in the capital to help improve the city’s housing stock. Policies such as the expansion, coupled with minimal provisions to cover future overheads, seek to undermine the supposed importance of tradespeople, deterring them from traveling into London to work on essential housing projects.
Clive Holland, broadcaster on Fix Radio, says, “I have to say, from a personal point of view, I think through the pandemic our industry was asked to continue to build which we did. Without the construction industry, the UK economy would collapse – you’ve seen a lot of strikes recently but if tradespeople ever decided to strike it would cause significant issues throughout the UK. Tradespeople haven’t had the pat on the back that they deserve for helping through the pandemic and putting themselves in dangerous situations.
“When the ban on red diesel came, the ULEZ extension, the general taxation of vehicles and the electric vans requirement, they are all burdens to tradespeople which seriously affects their income. It is not only happening in London it’s happening in cities around the UK including Birmingham and Bath, the tradesperson who is going about their daily job I think is being victimised. Particular at this time with Brits battling inflation and recession it means that customers are turning down jobs because they can’t afford it and tradespeople are encountering extra fees, such as the ULEZ charge which makes jobs less desirable.”