Will my local business fail under the new government?

Ross Lethbridge is the owner of FYSLA, a chauffeur company in Nottingham.

Having run the business for over 7 years, he takes great pride in helping clients travel from A to B in style.

From couples treating themselves to a date night out, all the way through to owners of large corporations, Ross meets people from every walk of life.

“We talk about everything, from families to holidays and of course, business. You hear about their day to day activities but also about their worries and problems.”

And with the rumoured changes in Labour’s Budget coming next week, there is a general consensus among everyone that the days of successfully running a small business are over.

For Ross in particular, he’s had to manage a large increase in business costs since Covid-19, followed by potentially more increases to come next week. These additional costs could include fuel duty or pay per mile taxes.

“It’s been a difficult time, to be honest. I talk to many in the industry and some have had to cut down on their fleet or cut down on driver hours. Some still haven’t recovered from their low bookings during lockdown restrictions.

Thankfully we’ve weathered the storm but who knows what will happen after the next Budget?”

Over half the cost of a tank of fuel in the UK is made up of tax and there is currently a temporary 5p cut on fuel duty which was put in place due to the war in Ukraine. It is rumoured that this will be taken away in the Budget next week.

But it’s not just transportation business that are suffering. His clients in other industries are also feeling the pinch.

I talk to so many people who travel with us. They’re all struggling with inflation. And if I have to put my prices up to cover my additional costs, who knows if they’ll still want to travel? Then if the work isn’t there any more, it could cost jobs too.”

Ross is also concerned about the other costs of running a business within the transportation industry.

“We’ve also seen a huge increase in vehicle purchasing costs. They’ve gone up 55% since we started FYSLA. We’ve looked into electric alternatives too but the range isn’t there yet for long journeys, so we’re pretty stuck. And let’s not forget the new ULEZ charges if we venture into London”.

There are also further rumours of a ‘pay per mile’ system which could be put in place. The Tony Blair Institute has suggested that Rachel Reeves implement a 1p per mile charge for cars and vans and 2.5p to 4p for lorries and heavy goods vehicles. This is because the government is likely to lose out on fuel duty income in the long term with the switch to electric vehicles.

But with all these changes, does Ross feel his business is going to fail at the hands of the new government?

“I understand they need and want to make changes. But if the government brings in further charges then we’re going to have to look at completely restructuring our business. I know many of my clients will have to think about restructuring theirs too. I’m sure we can make things work as we have done before, but I’m not convinced everyone will be in the same position as me”.

Chancellor Rachel Reeves will announce the official changes on Wednesday 30th October.

Until that point, Ross, his fellow competitors and his business-owning clients will all buckle up to see what the future holds for them.