This £2.6bn includes £1.4bn to support the continued uptake of electric vehicles, including zero-emission vans and heavy goods vehicles (HGVs), while £400m is allocated to support more charging infrastructure.
The Spending Review sets the day-to-day budgets of government departments over the next three years (from 2026-2029), used to pay staff and deliver public services.
Reaction has come from across the industry, including the SMMT’s chief executive Mike Hawes, who said: “The automotive industry recognises the pressure on the public purse and the need to divert funding to defence and growth. Automotive can deliver that growth but it depends on both competitive conditions and consumer confidence.
“Some support for EVs has been made available, but more substantive measures to incentivise private consumer demand are still needed if world leading targets are to be met.
“Government has already made great efforts to support a critical industry facing significant geopolitical challenges but without market-making interventions, that world-leading pace of transition may need to be reviewed.”
Logistics UK policy director Kevin Green, said that logistics underpins every sector that our communities and businesses rely on, every day. He said the Spending Review makes some “bold pledges” for transport with transport capital investment to rise 3.9% across the Spending Review period.
He added: “To turn these pledges into economic growth, it is vital that the government prioritises the logistics sector through the upcoming Industrial, Trade and Infrastructure Strategies – both by providing the infrastructure our sector needs to move goods efficiently, and by enabling our sector to efficiently deliver the country’s renewal that the Chancellor has committed to.
“While we welcome the Spending Review in principle, we, along with our members, are making clear to the Chancellor that this investment cannot be funded by higher taxation on hard-pressed businesses.
“Increases in employers’ National Insurance Contributions are costing our sector an estimated £1.7 billion, and our members simply cannot afford any more whether this is through fuel duty or other business taxes. It is SMEs that power the UK economy and they will be forced to pass on any cost increases which will drive inflation and hamper growth.”
In a media statement, the RHA said the Spending Review showed “little recognition” for the vital role of the freight and logistics industry in keeping supply chains moving with a “concerning lack of priority given to the much-needed road investment required to unlock growth and alleviate congestion”.
The RHA continued: “Based on current information, we are concerned that the government’s announcement of £24bn to cover both the Strategic Road Network and the Local Road Network appears to be a real terms cut compared to the previous Road Investment Strategy period. If so, this would be a missed economic opportunity.
The Strategic Road Network is the workplace of the commercial vehicle sector and is absolutely critical in keeping the flow of goods and people moving, boosting productivity through reduced congestion, strengthening regional economies, creating jobs and stimulating investment.”
The RHA said it welcomed the £2.6bn capital investment to decarbonise transport but, as its recent member survey showed, substantial additional support will be needed to help businesses decarbonise to meet the UK’s diesel lorry phase out dates in 2035 and 2040. The survey found that 70% of HGV operators surveyed say they have no plans to add zero-emission vehicles to their fleets.
On skills, the RHA added: “We welcome the additional £1.2 billion investment per year by 2028-29 for skills funding and await further details on how this will be allocated. The RHA has found that 200,000 more HGV drivers will be needed over the next 5 years to avoid a future lorry driver shortage. It is vital that skills investment supports this.
“The HGV Skills Bootcamp has proven to be a highly effective, flexible model helping tens of thousands into HGV driving roles. This must be continued to avoid a significant training gap in the sector.”
Michael Shaw, CEO of Aegis Energy, said the company welcomes the £2.6bn to decarbonise the UK’s transport system and commitment to electric vehicles, particularly vans and HGVs, is a "vital step toward a lower-emission future".
He added: "It’s especially encouraging to see £400 million ringfenced for the rollout of charging infrastructure. This investment must be focused on delivering a public charging network that is reliable, accessible, and fit for commercial vehicle use. The commercial vehicle sector is responsible for 10% of UK emissions but decarbonising it at scale means creating confidence in infrastructure, not just vehicles.
“Infrastructure developers are already making progress, but a joined-up approach between government, developers and fleet operators will be key to accelerating the transition.”
