Car makers say the Autumn Statement falls short of expectations.
Mike Hawes, SMMT Chief Executive, said, “SMMT welcomes the government’s commitment to improving infrastructure and investment in R&D, an area in which UK automotive punches above its weight.
“One of the main areas in which UK Automotive is playing a leading role is the development and introduction of low emission and connected and autonomous vehicles. The Chancellor’s announcement of £390 million will help promote our competitive advantage in these fields.
“We welcome the investment to enhance the charging network for electric vehicles, as well as further support to boost uptake of low emission buses and taxis. These markets are still developing and it’s critical the government continues to encourage this through consistent policies and investment.
“Furthermore, the commitment to connected and autonomous vehicle testing infrastructure is an area in which the UK is already one of Europe’s leading centres. This commitment will help cement that position and promote this next generation technology, which has the potential to transform lives – preventing more than 25,000 accidents and creating more than 320,000 new jobs.
“We are, however, disappointed that the government has not done more on business rate reform. SMMT called for the removal of plant and machinery from business rates valuation, which would have helped encourage further investment at this time of great uncertainty.
“While the Chancellor’s focus on improving UK productivity is needed, the automotive industry bucks the national trend with the most productive workforce in Europe.
“What is required, however, are further measures to support competitiveness in the supply chain of both automotive and other key sectors.”
Autumn statement snippets:
A major increase in infrastructure spending will mean an extra £400m to Wales.
Fuel duty rise cancelled for seventh year in succession – at a cost of £850m, saving average car driver £130 and van driver £350 a year.
Income tax threshold to be raised to £11,500 in April, from £11,000 now.
Higher rate income tax threshold to rise to £50,000 by the end of the Parliament.
Tax savings on salary sacrifice and benefits in kind to be stopped, with exceptions for ultra-low emission cars, pensions, childcare and cycling.
National Living Wage to rise from £7.20 an hour to £7.50 from April next year.
Employee and employer National Insurance thresholds to be equalised at £157 per week from April 2017.
Insurance premium tax to rise from 10% to 12% next June.
New tax hit coming?
|The Government’s push towards greener cars is causing concern among suppliers.
The Chancellor hinted at a new meaning for ultra-low emission cars but gave no indication of what this could mean except that it will be set out in a further statement on 5 December.
Some think this will be a dramatic cut in cars qualifying for zero or low emissions treatment under regulations, possibly 80gkm or less, with a corresponding hike in BIK for those emitting over a certain limit, maybe 120gkm or less.
LeasePlan says the timetable gives little opportunity to bring in new contracts and models, and will complicate rules and regulations while hitting some of the people it says it supports and who are ‘ just about managing’.
There is no doubt the Government has lost tax and fuel duty revenues with more low emission cars on roads, covering less miles but also more economically than before and a change to the formula calculations has been expected.
RAC director of insurance Mark Godfrey said, “After a recent double rise in Insurance Premium Tax, this further increase is a slap in the face for motorists who will surely see their premiums once again increase. It will mean three rises in in two years and a more than doubling of IPT from 5% to 12% making Insurance Premium Tax the stealth tax of our time.
“Insurance premiums have already risen by over £100 compared to last year, and motorists have told us they are feeling the pinch, with 57% telling us that their premiums have increased over the past 12 months.
“We are also concerned that the Government’s whiplash reforms, while welcomed, will not achieve savings for motorists as only a small number of insurers have so far committed to passing the savings on.
“The Chancellor may now be at risk of encouraging some hard-pressed motorists to break the law by driving without car insurance, which will further increase premiums for law-abiding drivers. We would urge the Government in the name of road safety, to reconsider this rise.”
RAC fuel spokesman Simon Williams added, “The Chancellor’s commitment to freeze fuel duty will be greeted with relief by motorists and businesses at a time when we know drivers are concerned that fuel prices will rise significantly over the next six months – which might be the case if oil-producing countries that are members of OPEC commit to an oil production cut when they meet this time next week.
“The Chancellor’s decision to extend the freeze shows that he understands that motorists are the backbone of the British economy. It is vital that in such uncertain times, the Government can give as much certainty to them as possible.”
The Road Safety Foundation said, “This is, of course, welcome, but we would like to see a firm commitment from those local agencies to tackle high risk roads under their responsibility.
“Our report, out last week spelt out and mapped where the unacceptably high risk roads are. It identifies the economic cost of failing to address the risks and outlines the improvements – some as simple as carrying out routine maintenance – that could save lives for huge financial return.
“Infrastructure safety measures are quick to implement, can be done anywhere in the country, and are certain to deliver.”
Last week, the Road Safety Foundation welcomed an announcement from Andrew Jones, the Transport Minister, in which he offered a grant of up to £1m to enhance and expand safety programme of West Sussex County Council to address the A285 – highlighted in the report as the most persistently high risk road in England.
LeasePlan UK’s Managing Director, Matt Dyer said, “Now in its seventh year the freeze on fuel duty is a welcome boost to UK households and businesses saving an average of £130 per driver.
“Not only will this help UK motorists, it will also be a continued reprieve to those who work in logistics, with light commercial vehicles expected to save an estimated £350 per year.”
The motor trade view from Rupert Pontin, Glass’s director of valuations, was there are some interesting points to consider in the statement, “The Chancellor has underlined how tricky the next few months and years are likely to be because of the economic turbulence created by the BREXIT vote.
“While the underlying strength of the economy is pretty good, at least in comparison with other, similar countries, we are entering a period where growth will slow, inflation will rise and borrowing will be higher. None of these things are good for the general economy and are certainly not encouraging signs for the motor or fleet industries or for private or business motorists. These are going to be reasonably unpredictable times.
“That is today’s real story but, having said that, there are some points of interest in there. Primarily, there is an underlying push towards ULEV technology that can be seen in the changes to salary sacrifice rules, the new company car tax rates for 2020-21 and even in the capital allowance for EV chargers. It seems pretty clear that the Government envisages us driving around around in largish numbers of electric and advanced hybrid vehicles within five years which, in our view, is a good match for the rate of development of EV technology. This will probably help to power new car sales.
“It is also interesting to see the commitment that is being made to road building schemes, especially on a localised infrastructure level, although the exact details have yet to be announced. This is a Government that continues to be committed to cars, vans and trucks as the most popular means of personal and business transport right across the country.
“At a more prosaic level, for the motorist using their car today, the Fuel Duty freeze is good news, as are the measures designed to minimise false whiplash claims that are pushing up motor insurance premiums. For people whose personal budgets are under some pressure, these measures are worthwhile if unspectacular.”