2025 WRAP UP
What headwinds and tailwinds do you see in the economy and in the politics surrounding cycling?
What headwinds and tailwinds do you see in the economy and in the politics surrounding cycling?
Dan Parsons, Fully Charged Macro economic and political issues continue to impact the cycle industry in both positive and negative ways. On the positive, cycling remains essential to emissions targets, healthier cities and reduced congestion. Rising costs of car ownership make cycling, and especially eBikes, a sensible alternative. Urbanisation is only going in one direction, with increased congestion and limits on space making cycling an obvious choice. Cycling has a key role in reducing healthcare costs, as opposed to other forms of transport.
On the negative, there’s the cost-of-living crisis to contend with, a lack of investment in infrastructure and the negative media narratives that we’ve already mentioned. We must do our best to turn the negatives back into positives.
Adam Tranter, Fusion Media Uncertainty usually favours the bicycle because people look for solutions that are cheap, reliable and independent of volatile systems.
On paper, Labour’s missions of improving health, safer streets, economic growth, decarbonisation should all lead to a surge in cycling investment. The rhetoric has moved in the right direction. But rhetoric alone doesn’t put protected routes on the ground, and delivery is still lagging.
At the same time, households are cost-sensitive, so value-driven everyday cycling – commuting, errands, local trips - has huge potential if the government chooses to unlock it.
Jonathan Harrison, Association of Cycle Traders The National Living Wage (NLW) increase will impact all small businesses, including cycle retailers. We’ve been working very closely with the Low Pay Commission throughout this process. The challenge is that the Government’s remit requires the NLW to track at 66% of median UK earnings. With average earnings rising steadily – up 5.2% in 2025 – that mechanism inevitably drives wage increases higher than many small businesses can absorb.
We made a strong case for aligning the rise closely with inflation, which at the time was around 3.8%. While a 4.1% increase is still a significant challenge, it is lower than it might have been under the original trajectory and is a smaller uplift than in recent years.
Prior to the budget, we expressed concerns that the Labour proposal to transform business rates did not go far enough. Our complaint was that the government was tinkering with an unfair tax, rather than the wholesale reform promised pre-election. We also asked the government to consider extra relief for small retailers who will lose the current 40% discount on rates.
As predicted, the business rates transformation proposal has failed. This year we had a rates revaluation, which appears to have favoured large businesses on retail parks. For instance, a large Sainsbury's near to where I live will pay £70K less in business rates, whilst a smaller shop in the area will pay a lot more.
There was one piece of good news for business rates. They listened and introduced a Support Small Business Relief that will cap the increase to an average 15% (even as low as 5% depending on the rateable value). This is better than we feared when looking at the budget figures, but 15% is still too high when we consider the above inflation increase in other costs such as wages.
We also campaigned hard on the low-value items issue alongside other retail groups. At present, items under £135 entering the UK are duty-free, and many sellers and importers are also avoiding VAT altogether. Beyond the unfair competition this creates for legitimate retailers, we are increasingly concerned about the safety implications – particularly with products such as eBike conversion kits and batteries, where poor-quality imports present real risks.
In the Budget, the Government committed to closing this loophole, but gave itself a four-year timeline. We have formally challenged that schedule, especially given that the United States implemented an equivalent measure in under a year.
What structural changes would you ask of the Treasury if they are interested in cycle to work scheme reform?
What structural changes would you ask of the Treasury if they are interested in cycle to work scheme reform?
Steve Garidis, The Bicycle Association We believe that the C2W scheme is a valuable incentive to get more people cycling. As a scheme, its benefits far outweigh its costs to the public purse, and so we were pleased to see that the Treasury also took this view.
However, we also believe it could be made significantly fairer and more accessible. At present, only employees paid via PAYE on above minimum wage and via a participating employer can access the scheme. This could be addressed by opening up the scheme via self-assessment to employees without a participating employer and to self-employed people.
We also think it would make sense to extend the scheme beyond simply ‘commuting’, for example, recognising cycling’s well-evidenced health benefits, the scheme could be opened up to retired people.
Dan Parsons, Fully Charged The cycle to work scheme is a blessing and a curse for retailers. The scheme undoubtedly makes the consumer’s buying decision easier, but its current structure is skewed to favour the higher earners and heavily impacts profits of the retailer, who ultimately are doing all the work to create content and marketing to increase awareness, drive test rides and ensure that they continue to offer service and support to the customer.
I’d like to see a fairer, more accessible scheme, possibly usage-based, open to more people, including lower earners, the self-employed and retired, whilst also not removing such a chunk of retailer margin.
Adam Tranter, Fusion Media I’ve backed calls previously to extend eligibility to those on minimum wage and to pensioners. The people who would most benefit from cheaper active travel get the least support. We should look into whether the administration is as straightforward as it can be; it's hard to ignore retail businesses losing a lot of their margin.
The second shift is conceptual: turn it into a “cycling for health” scheme. The idea that bikes must be used strictly for work trips is outdated. We don’t insist that people use electric car subsidies only for commuting. It’s a double standard, and it actively suppresses the behaviour we claim to want more of.
Jonathan Harrison, Association of Cycle Traders There are six things I would like to see the Treasury change. Those are an extension of the scheme rules to apply to the purchase of bicycles and not just for cycling to work. Secondly, I would hope to see the scheme restructured to engage all possible workers (including the self-employed and those on low incomes). Next, a significant reduction in the commissions charged to participating retailers. Fees should be fair and transparent. Fourth, a more equitable split with suppliers sharing in the funding of any essential costs incurred by cycle to work providers. Penultimately, to see an improvement of payment times from providers to retailers. Finally, I would like to see the retail sector involved in changes to scheme terms and conditions.
Sham Vesamia, A&S Cycles Cycle to Work is vital for getting people on bikes, especially eBikes. If changes were coming, I’d ask for:
- Simpler, clearer scheme rules for everyone.
- Higher purchase limits to reflect real-world eBike costs.
- Inclusion for self-employed riders.
- Unified, fair commissions currently, some providers charge independents high fees. The biggest change would be an industry-wide cap, say 5%, like one provider already does.
Finally, Cycle to Work isn’t a loophole; it’s a public health and transport investment. Small tweaks could make it truly effective, while cuts or unfair fees push people back into cars.