Motor industry calls for clear and consistent Budget 2010 policies

10 March 2010 #SMMT News


The UK motor industry has delivered a stark message to the Chancellor as the 2010 Budget was declared for Wednesday 24 March. Measures to encourage industry and boost consumer confidence will be required if the recovery is to be sustained and strengthened.
In its annual pre-Budget submission the Society of Motor Manufacturers and Traders (SMMT) urged the Chancellor to implement measures to support long-term investment, employment and technological development in the UK motor industry.  Recommended measures include:
Nurturing recovery in the car and commercial vehicle markets:
·         Increasing the Annual Investment Allowance for businesses to £500,000 to boost spending on vans, trucks, construction equipment, buses and coaches.
  • Retaining and further enhancing the first-year writing-down allowance to 60% to incentivise business and fleet investment in the van and truck markets.
·         Removing or delaying the planned introduction of a first year rate of tax (VED) on new cars from April 2010.
·         Removing the 3% diesel car penalty in the company car benefit-in-kind (BIK) calculation.
·         Reconsider plans to remove the £80,000 cap on company cars that adversely impacts UK-built premium car makers.
Supporting future investment, growth and development:
·         Delivering clarity and consistency across all vehicle tax and incentive programmes, in supporting the delivery of ultra-low carbon vehicles.
  • Reconsidering the removal of the 20 pence per litre incentive for biofuels due to end in April 2010 to sustain and develop the technology-neutral approach to ultra-low carbon vehicles.
  • Greater flexibility in the Automotive Assistance Programme and more effective delivery of wider support programmes to ease access to finance and credit.
“Government has recognised the importance of manufacturing and has signalled its commitment to working collaboratively with industry. This has been vital in minimising the impact of the recession on the motor industry. The scrappage scheme has been a lifeline for the new car market, but further measures are now necessary to build confidence and encourage new investment,” said SMMT chief executive, Paul Everitt. 
“The level of collaboration between government and industry is set to increase significantly as the Automotive, Supply Chain and Technology Councils work to realise the new opportunities from the transition to a low carbon economy,” continued Everitt.  “Budgetary measures that support the Councils’ plans will help to signal a long-term commitment to manufacturing that will in turn boost business confidence and the attractiveness of the UK to inward investors.”
This month sees the end of the successful Scrappage Incentive Scheme. Combined with a lack of consumer and business confidence and continued market challenges 2010 is expected to see fewer registrations (1.8m) than in 2009 (1.99m).

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