News Story

Industry’s response to the Chancellor’s 2018 Budget

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Industry leaders share their views on the Budget…

Mike Hawes, SMMT Chief Executive said: “There are some welcome announcements in the Budget, including further funding for the industrial strategy, in particular the Stephenson Challenge and investment into infrastructure. Amid continuing Brexit uncertainty, however, the automotive industry was looking for a stimulus to boost a flagging new car market. We wanted to see more incentives for consumers to purchase the latest, most environmentally friendly vehicles.

“The forthcoming review into the impact of WLTP on Vehicle Excise Duty and company car tax must, therefore, ensure that motorists buying the latest, cleanest cars are not unfairly penalised. Industry looks forward to working closely with government on this review to ensure we encourage the newest, cleanest vehicles on to our roads rather than incentivising consumers and businesses to keep older vehicles going longer.”

ACFO chairman John Pryor comments: “… ACFO questions what has happened to the government’s ‘green’ agenda. Recently the government cut the Plug-In Car Grant and in the Budget it has failed to answer our call for a U-turn on the decision to increase to 16% benefit-in-kind tax on cars with emissions of 50g/km or below in 2019/20 and bring forward the already announced reduced rates, including the 2% threshold for 100% electric models and those with an electric mileage range of up to 130 miles, to April next year from 2020/21.

“Those twin decisions will, ACFO believe, only serve to dampen fleets’ enthusiasm for ultra-low and zero emission cars, at least in the short term, at a time when the government says it wants to drive out petrol and diesel engined vehicles from the UK car parc.

“Budget 2018 has been a waste of a golden opportunity for the Chancellor to provide both clarity and long-term stability to enable fleet decision-makers to shape company car policies. The fleet industry must now wait until spring 2019 to know the future shape of company car benefit-in-kind tax and, in the meantime, uncertainty continues to rule.”

Claire Haigh, Chief Executive of Greener Journeys, said: “The extension of the Transforming Cities Fund provides a welcome boost to towns and cities across the UK which are suffering from congested roads and illegal levels of air pollution, both problems which are exacerbated by too many cars on the road.

“However, the continued freeze in fuel duty will have a severe negative impact on air pollution and public health in the UK. With roadside air pollution causing up to 50,000 early deaths a year, we urgently need to tackle our air quality crisis and move away from our reliance on the car to more sustainable public transport.

“The fuel duty freeze has already made the price of fuel at the pump 13% cheaper than it would otherwise be resulting in 4% more traffic and up to 200 million fewer bus journeys over the past seven years. Greener Journeys research has also shown that it has caused an additional 4.5 million tonnes of carbon dioxide emissions and 12,000 tonnes of harmful NOx emissions.”

Richard Hipkiss, Managing Director, Fleet Operations
“The Chancellor’s decision to delay a government review of the impact of WLTP on Vehicle Excise Duty (VED) and company car tax (CCT) will come as a major blow to the fleet sector. The lack of insight into tax liabilities from April 2021 continues. Strategic long-term planning remains difficult with the lack of clarity set to continue stymying procurement decisions for many fleet operators.”