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O&G business will welcome UK Gov.'s record road improvement programme

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Oilfield Technology,

A leading oil and gas industry logistics expert has said the sector’s businesses would welcome the Government’s pledge to spend £30 billion on English road improvements and should see the announcement as a key part of its Brexit preparations.

David Johnson, managing director of Leeds-based Tudor International Freight said the funding represented a 40 per cent increase on the current five-year highways plan and had been acclaimed by the Government as “the biggest-ever cash injection for England’s largest roads.”

The funding becomes available in 2020 - at the end of which the UK’s transition period after it leaves the EU on 29 March next year is due to conclude - and covers the period to 2025.

Earmarked for strategically important routes, such as motorways, the investment will be used for building, improvements and upgrades, as well as easing congestion. It includes £3.5 billion for major routes under the remit of local councils.

The £30 billion is to be augmented by £420m for remedying potholes, bridge repairs and other more minor works, which, the Government has said, will be available immediately. This is on top of the annual £1 billion highways maintenance budget and recently-announced £300 million pothole repair fund.

Mr Johnson said: “Although this point has not been widely made, the sums apportioned for roads can be viewed as part of the Government’s efforts to get the UK’s businesses - including the oil and gas sector - and the infrastructure on which they depend in the best possible shape for post-EU trading. These preparations will be especially important if we crash out without a withdrawal agreement.

“This investment is vital if our industry is to be truly competitive after Brexit, as it will need to move goods to and from ports, airports and other destinations as easily and quickly as possible. Currently, congestion and other problems with our road system cost businesses, including freight forwarders like us, considerable time and money each year, with a proportion of the expense in our industry having, unfortunately, to be passed on to customers.”

Mr Johnson said the new programme the was a landmark measure, as it meant all vehicle excise duty would be used for road improvements from 2020 for the first time ever.

He said: “Highways are a crucial part of our transport infrastructure, in dire need of improvement, and we feel that oil and gas businesses will therefore share our view that this Treasury income being used to directly benefit the people and organisations who provide it is a thoroughly desirable development.”

Regarding other recent Government announcements, Mr Johnson said oil and gas businesses and their freight forwarders would also welcome the continued freeze in fuel duty, now pegged for a ninth consecutive year. This was, he said, a step which could be seen in the same pre-Brexit light as the road improvement programme.

He said: “We do, though, agree with our trade body, the British International Freight Association, that it would have been even better for businesses if fuel duty had been reduced, an essential user rebate implemented, and a stabilisation mechanism introduced.”

Mr Johnson said the issue of the Brexit negotiations continued to dwarf all others for oil and gas businesses trading with the EU, and the UK generally.

He said: “Important though the road improvement programme and fuel duty freeze are, the major items on the agendas of the sector’s EU traders at present continue to be the withdrawal and trade agreements the UK will hopefully conclude with the bloc in the coming months.

“The ghastly prospects for the shipping of goods between the two areas of tariffs being charged, complex new customs documentation being needed and long delays taking place remain uncomfortably real. Avoiding these is therefore still the number one political hope of oil and gas sector traders with the EU and the forwarders like ourselves that they employ.”

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