SMMT has urged Chancellor Gordon Brown to:
- State clearly the position on the single currency and
UK entry to the Euro
- Broaden qualifying criteria for Climate Change Levy discounts
- Ensure that costs of vehicle recycling are shared fairly
by all stakeholders
- Consult the industry on initiatives to reduce truck emissions
- Give incentives to encourage R+D in the UK automotive
sector
The motor industry today called for the Chancellor to clarify
the government’s position on the single currency in the Budget next week. It
comes at a time when the industry is facing an increased tax burden, with the
introduction of the Climate Change Levy, and shortly after a Trade and Industry
Select Committee report urged government to support UK motor manufacturers.
With no clear government position on the UK’s entry to the
Euro, manufacturers battle against high costs and an uncertain future. Sterling
remains strong and component suppliers in particular struggle to be competitive.
Eighty per cent of vehicles exported from the UK are destined for Europe and
fewer components are being sourced from British suppliers, threatening jobs
in this sector. A stable and competitive exchange rate must be a government
priority if companies are to continue to invest in and support manufacturing.
SMMT Chief Executive Christopher Macgowan said, ‘The motor
industry is responsible for some 800,000 jobs and generates £46 bn for the UK
economy. It simply doesn’t make sense for the Chancellor to continue to ride
on waves of uncertainty coupled with high exchange rates while loading manufacturers
with new taxes. As we wait for a decision on the single currency, companies
are sinking under a raft of tax and currency pressures.’
Companies in the automotive sector will be hit by the Climate
Change Levy on 1 April, increasing net energy costs by 10 to 15 per cent. Although
SMMT has negotiated a discount for several vehicle manufacturers, the narrow
qualifying criteria mean few in the sector can benefit. Those that have already
invested in energy saving will be unfairly penalised because they do not run
processes covered by the pollution prevention and control directive. SMMT has
urged the government to broaden discount criteria to reduce costs for those
demonstrating a real commitment to reduced energy use.
What else matters to the motor industry?
European – End of Life Vehicles Directive
The free take back of vehicles will create more costs for vehicle
manufacturers. Producer responsibility must not be imposed any earlier than
stated in the Directive, when its rules are implemented in April 2002. The industry
also believes costs of disposal should be fairly distributed among all the beneficiaries
of a vehicle throughout its life, not just the manufacturer. The government,
oil industry, insurance industry and recycling industry all take significant
revenue from the car throughout its life. They should contribute to the recycling
costs.
Truck tax and emissions
SMMT is pleased that the government gave valuable rebates on
vehicle excise duty (annual road tax) for all trucks. The new, simpler truck
tax system is also welcome. But there are anomalies at some weight bands where
the difference in payload capacity is out of proportion to the different truck
tax rates.
The new scheme also undermines the Reduced Pollution Certificate
system. It cuts the discount for expensive catalytic exhaust recycling traps
and makes their fitment punitively expensive. The government needs to think
again about incentives for environmentally friendly road transport operation
and SMMT has a number of innovative proposals which may save the nation billions
in truck fuel bills while making consistent and real cuts in emissions.
Research and Development
Government support for motor industry research and development
is needed in the drive to promote innovation in the UK. SMMT would like to see
some of the £54 million earmarked for regional innovation funds invested in
R+D and for the government to provide tax credits and other fiscal incentives
to stimulate investment.
ends.
