Public Affairs monitoring for week ending 22 May 2026

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Middle East update: Government announces Fuel Duty increase delay, HGV road tax holiday, and red diesel duty rate cut

The Prime Minister and Chancellor announced on 20 May that September’s planned Fuel Duty increase will be deferred until 31 December. Alongside this, the government set out a 12-month holiday for HGV Vehicle Excise Duty (VED) and a red diesel duty rate reduction, benefiting rail freight. Logistics UK welcomed the decision following sustained engagement on the cost pressures facing the sector from the ongoing Middle East conflict.

Logistics UK analysis suggests the Fuel Duty change will save the sector an estimated £34.5 million compared to the increases that were planned. The VED holiday is expected to deliver a further £220 million in savings across the sector. The red diesel measure is estimated to save £3.6 million for rail freight operators by the end of the year.

In a statement to the House of Commons on 21 May, the Chancellor said that the government stands ready to act if market conditions worsen significantly later this year, and Logistics UK responded that our engagement with government on a broader package of support will continue. Logistics UK CEO Ben Fletcher has responded to the Chancellor’s statement here.

Shadow Chancellor Sir Mel Stride also secured an urgent question on 21 May on this matter, during which Kirsteen Sullivan MP (Labour, Bathgate and Linlithgow) highlighted the vital role of the logistics and haulage sector in supporting local economies and supply chains, welcomed the support package, and raised concerns about driver welfare facilities. Johanna Baxter MP (Labour, Paisley and Renfrewshire South) also emphasised the importance of logistics businesses to regional employment and economic resilience, referencing her recent visit to the Malcolm Group in her constituency, and raised concerns about driver welfare standards and the growing impact of freight crime. Responding, Chief Secretary to the Treasury Lucy Rigby recognised the sector’s critical role in keeping goods moving and moderating consumer prices, and confirmed the government is taking forward action on freight crime and welfare.

Read our latest Middle East update here which includes the latest data on fuel prices.

UK and Gulf strike historic multi-billion-pound trade deal

The UK became the first G7 country to secure a deal with the Gulf Cooperation Council (GCC) on 20 May. The deal removes an estimated £580 million in duties a year, based on current UK exports to the GCC, once the agreement is fully implemented, with £360 million worth of this to be removed on day one of the agreement entering into force.

The new trade deal will reduce tariffs on food exports, medical equipment and advanced manufacturing. Logistics UK has welcomed the announcement, saying that it will boost confidence and create momentum for UK businesses trading internationally.

John Swinney voted as Scotland’s First Minister with key cabinet positions announced

John Swinney was formally confirmed as First Minister of Scotland on 19 May, following the recent Scottish Parliamentary election in which the SNP remained the largest party. The SNP secured 58 seats, falling short of an overall majority, resulting in a minority government. Swinney was sworn in on 20 May and subsequently appointed his Cabinet.

The new Scottish government was appointed on 20 May. Key appointments relevant to logistics include:

• Stephen Flynn – Cabinet Secretary for Economy, Tourism and Transport
• Jenny Gilruth – Deputy First Minister and Cabinet Secretary for Finance and Local Government
• Shirley-Anne Somerville – Cabinet Secretary for Social Justice and Housing
• Gillian Martin – Cabinet Secretary for Climate Action and Rural Affairs
• Ivan McKee – Cabinet Secretary for Public Service Reform
• Màiri McAllan – Cabinet Secretary for Education, Culture and Gaelic

The transport portfolio sits within the expanded Economy, Tourism and Transport brief, which includes responsibility for strategic transport projects, freight, and wider infrastructure policy.

Logistics UK has written to the First Minister and will be writing to relevant Cabinet members to seek early engagement on priorities including infrastructure investment, planning, decarbonisation and the efficient movement of goods across Scotland.

Also this week

Government

• The Chancellor published a policy paper on 20 May outlining planning reforms to accelerate infrastructure delivery. Measures include a new “Critical National Importance” route for major clean energy projects and a fixed legal challenge window for other infrastructure, including transport, aimed at reducing delays and improving investor certainty.
• The Transport Secretary confirmed alongside the Lovegrove Review that HS2 will not begin operations until at least May 2036 and will cost at least £87.7 billion. The government will reduce maximum train speeds to manage costs. In a statement to Parliament, the transport secretary emphasised a focus on capacity rather than speed, highlighting HS2’s role in freeing up space for additional rail freight services and supporting modal shift.
• The Competition and Markets Authority has urged government to adopt a more strategic, coordinated approach to road and rail procurement, warning that fragmented procurement has driven inefficiency, higher costs and limited innovation, despite £19 billion annual spending (excluding HS2). The report estimates reforms could save up to £5 billion per year and is calling for a sector-wide strategy led by HM Treasury, with government required to respond within 90 days.
• The National Audit Office (NAO) published a report on 18 May stating that the Department for Transport’s £1.1 billion innovation programme lacks clear prioritisation and strategic oversight, risking inefficiencies. The report calls for stronger coordination and clearer risk management.

Parliament

• Labour’s National Executive Committee approved Andy Burnham on 15 May to contest the 18 June Makerfield by-election, following the resignation of MP Josh Simons to enable his return to Parliament. Early modelling from Survation suggests a close Labour-Reform contest with 45% to 42% vote share respectively. Robert Kenyon is Reform UK’s candidate, a self-employed plumber and gas engineer, and Reform councillor for Bryn with Ashton-in-Makerfield North.
• Several written parliamentary questions relevant to logistics received answers this week:
  • Callum Anderson (Labour, Buckingham and Bletchley) asked about improving logistics worker health and wellbeing in his constituency. Transport Minister Keir Mather responded on 18 May and said the government is supporting through training initiatives, improved lorry parking and welfare facilities, NHS health programmes, and wider employment schemes.
  • Callum Anderson (Labour, Buckingham and Bletchley) asked about accelerating investment in HGV charging infrastructure in his constituency. Transport Minister Keir Mather responded on 18 May stating the Depot Charging Scheme will part-fund charging infrastructure building upon the Zero Emission HGV Infrastructure Demonstrator (ZEHID) programme. National Highways is delivering webinars to support truck stop operators to prepare for zero emission HGV charging.
  • Rebecca Smith (Conservative, South West Devon) asked about Depot Charging Scheme funding allocations. Transport Minister Keir Mather said on 20 May £171 million has been allocated to the Depot Charging Scheme for financial year 2026/27- 2029/30, with £28 million confirmed for the 2026/27 Financial Year and £38 million for 2027/28.
  • Jerome Mayhew (Conservative, Broadland and Fakenham) asked about capital funding plans for large-scale port grid upgrades. Transport Minister Keir Mather responded on 20 May, saying the government is reforming the grid connections process so ports can access the large-scale grid upgrades. Measures in the Maritime Decarbonisation will help unlock private funding and the government’s response to the port’s energy needs consultation will be released later this year.
  • Jerome Mayhew (Conservative, Broadland and Fakenham) asked about the outcomes of the Rail Engagement Group’s (REG) meetings. Transport Minister Keir Mather responded on 20 May that three REG meetings have been held and discussed creation of Great British Railways and the Railways Bill’s progress.
  • Dr Al Pinkerton (Lib Dem, Surrey Heath) asked about the Schengen travel restriction’s impact on international haulage firms. Transport Minister Keir Mather said on 18 May that the department is researching the 90-in-180-day Schengen immigration limit impact on international operations of GB-based HGV and coach businesses and will publish results in due course.
• Health Minister Baroness Merron led a Lords debate on the King’s Speech on 20 May. Peers raised concerns about infrastructure delivery, planning delays and regional investment. In response, the government reiterated its commitment to infrastructure-led growth, emphasising planning reform and confirming transport networks as central to economic policy, alongside greater devolution of funding and decision-making.
• A Commons debate on energy security on 19 May highlighted concerns about the impact of energy policy on industrial competitiveness and supply chain resilience. MPs raised risks around refinery closures, rising costs and import dependency. Opposition speakers argued that reducing North Sea production could increase reliance on foreign energy and weaken domestic supply chains.
• The European Affairs Committee held a session on dynamic alignment on 19 May. Evidence highlighted that SPS alignment is primarily a trade facilitation issue with direct logistics impacts, particularly on border friction, port operations, costs and freight routes. Ports warned that changes could affect the viability of existing infrastructure investments, with potential cost implications across supply chains.
• The Work and Pensions Committee held a session on youth employment, education and training, highlighting declining entry-level job opportunities and skills mismatches. Witnesses emphasised the need for stronger employer engagement and more effective school-to-work transitions, with implications for sectors reliant on early-career labour, including logistics.

Devolved, regional and local

• The Scottish Affairs Committee began evidence sessions on 20 May examining the economic and social impact of fixed links between Scotland’s Islands, including tunnels and bridges.
• Belfast Harbour unveiled a £1.3 billion expansion plan covering cargo, cruise and offshore wind operations, with further investment linked to housing and real estate development, the Financial Times reported on 19 May.

Coming up

• Logistics UK has its Annual Conference and Sir James Whitehead Address on Wednesday 3 June bringing together industry experts, government, and policy makers for wide-ranging discussions on issues impacting the logistics sector. We will also launch our 2026 Logistics Report including latest data on the size of the sector in terms of GVA and employment.
• Parliament is entering recess on Friday 22 May, returning on Monday 1 June.
• Lisa Smart MP (Lib Dem, Hazel Grove) has secured a debate on the role of rail freight in the transport network on Wednesday 3 June. Logistics UK has shared its Railways Bill briefing with her ahead of the debate.
• Transport Minister Lord Hendy is leading the second reading of the Civil Aviation Bill on Tuesday 2 June.
• There are Energy Security and Net Zero Oral Questions on Tuesday 2 June.