2025 was a pivotal year for logistics and it was important that the sector was recognised in the Industrial Strategy as critical to boosting UK productivity. While it was disappointing that our sector was not named as “foundational” in the final publication, it was encouraging to see the strategy state logistics “makes a vital contribution to the UK economy and the competitiveness of the IS-8, ensuring that the right goods are in the right place at the right time.” This is an appreciation of how logistics is driving the UK’s supply chains and acting as a key pillar of the nation’s business ambitions.
Acting Chief Executive at Logistics UK
Smooth trade by reducing border friction
The appointment of Keir Mather MP as Minister with specific responsibility for freight and borders is further recognition for the sector. As we move into 2026, it is crucial that the Minister works with departments across Whitehall to implement an ambitious plan for freight and logistics: creating an environment where the logistics sector can thrive is essential if our industry is to deliver the growth it has the potential to achieve. Key for the government (if the sector is to achieve this ambition) is avoiding further increases in the tax burden that only stifle growth and drive inflation.
Increased business costs inhibiting growth
The rise in employer National Insurance Contributions (NIC) in the 2024 budget is estimated to have cost the logistics sector £1.7 billion this year alone, as the industry employs 2.7 million people or 8% of the UK workforce. At the time of writing, it is uncertain whether there will be further increases following the Autumn Budget. What is clear is that any increase in NIC would be a direct tax on jobs, damaging competitiveness and investment in skills.
Business rates are a significant fixed cost for logistics. Warehouses, distribution centres and logistics hubs across the country already face rising bills, with proposals for a higher multiplier on properties with a rateable value (RV) above £500,000 set to affect our sector disproportionately. This will add millions to operators’ costs, which will ultimately and unavoidably have to be passed on, through supply chains, to retailers and consumers. Logistics UK continues to urge the Treasury to ensure reforms to the Business Rates system protect investment in logistics infrastructure and do not create additional inflationary pressures.
Conclusion
Logistics is the lifeblood of the UK economy, underpinning supply chains and ensuring goods reach every corner of the country. Our members remain committed to delivering for customers and the wider economy but to do this, policymakers must act decisively to create a stable, cost-effective environment where logistics can thrive for decades ahead.
LOGISTICS UK
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