Motor industry outlines priorities ahead of spending review

02 September 2010 #SMMT News

he UK motor industry has urged chancellor George Osborne to consider the significant economic contribution made by industry when he makes tough decisions in the Comprehensive Spending Review, set to be published on 20 October. In a letter to the chancellor, The Society of Motor Manufacturers and Traders (SMMT) called for emphasis on easing access to finance and credit for businesses and consumers, encouraging investment in UK skills and low carbon research and development (R&D), and promoting international trade.

SMMT acknowledged austere times and outlined opportunities for government to ensure industry remains productive, strong and prosperous, through identifying measures where spending must be protected or where more investment is needed to help re-balance the economy. The submission stressed concern over announcements in the Emergency Budget, such as capital allowance reduction and uncertainty over R&D policy, which could impact on industry investment and the ability to demonstrate that it is ‘open for business’.

“Industry recognises the challenges facing government in reducing national debt while maintaining public services and fully supports plans to see a re-balancing of the economy,” said SMMT chief executive Paul Everitt.

“It is essential that government and industry work together to identify priorities for the limited resources that are available. The UK Automotive Council is forging a strong collaborative partnership between industry and government and has established a clear, long-term strategy for the UK automotive sector. It seeks to make the UK a leading player in the transition to ultra-low carbon vehicles with particular emphasis on encouraging R&D and rebuilding the UK supply base for current and emerging technologies.”

Specific areas for attention identified by SMMT included:

Industry competitiveness – R&D and government structure

  • Maintain the principle of R&D tax credits to drive investment and encourage the development of new technologies, ensuring they work for large and small companies.
  • Provide long-term funding for the Technology Strategy Board (TSB).
  • Ensure that the structures which replace Regional Development Agencies (RDAs) are capable of effectively targeting support and resources, such as the Regional Growth Fund, towards economic growth sectors.

Skills and training

  • Invest in a strong skills base to boost UK competitiveness.
  • Ensure resources are focused on the sectors that will add most value to the economy and support its re-balancing.
  • Make sure skills support is accessible by companies of all sizes.
  • Implement stronger, more effective mechanisms to guarantee quality of training to learners and employers.

Position the UK as a global leader for ultra-low carbon vehicles

  • Ensure low carbon incentives are sustained until there is a flourishing early market for these products.
  • Maintain its coherent and co-ordinated approach towards the transition to benefit fully from the ultra-low carbon vehicles, directing resource towards the Automotive Council, the Technology Strategy Board and OLEV to equip the UK for the future.
  • Consider extending incentives to commercial vehicles.

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