Budget roundup
Chancellor George Osborne has today delivered his eighth Budget downgrading UK economic growth forecasts and warning of the risks of leaving the EU.
The statement included:
- A freeze on fuel duty for the sixth year in a row
- A 0.5% increase in insurance premium tax (IPT) with any income raised put towards flood defense projects
- Reforms to business rates for small businesses with many businesses removed from paying rates, along with simplifications to the administration and calculation of rates.
- Corporation tax will be cut to 17% by April 2020 – making it one of the lowest rates in the world.
- Commercial stamp duty will be reformed with rates reduced mainly for the benefit of small businesses.
Automotive industry responses:
Sue Robinson, director of the National Franchised Dealers Association:
‘Today’s budget announcement continues to encourage long term investment and help businesses. The government made clear their intention to ensure the UK economy remains on track.
‘The measures announced will help businesses allowing more money to be invested in growth and employment. We are encouraged to see the further reduction in corporation tax following previous announcements and also the changes to the administration around the rating regime.
‘The holding of fuel duty rates will be of benefit to consumer – saving houses an average of £75 a year for the average household, allowing consumers more money to invest and spend elsewhere.’
David Bizley, RAC chief engineer:
‘Motorists will be relieved that the Chancellor has not used low fuel prices as an opportunity to raise duty on petrol and diesel to help reduce the deficit.
‘But, with the government’s own evidence showing that lower fuel prices are good for the economy, we are disappointed Mr Osborne didn’t make a longer-term commitment to freeze duty beyond next year’s Budget. This would have been the ideal opportunity for the Chancellor to freeze fuel duty for the life of this Parliament and improve his already good record on fuel duty.’
Quentin Willson of FairFuelUK:
‘Freezing duty for a fifth year is hugely significant. The Treasury now has five years of evidence to prove that keeping fuel duty low has helped improve GDP, stimulate economic activity and actually improve tax receipts. The Chancellor knows that low transport costs have had an enormous economic benefit to the UK over the last five years.’
Rupert Pontin, head of valuations, Glass’s:
‘The main headline in terms of motoring is that, contrary to many forecasts, duty on fuel will be frozen again. This is clearly good news for anyone who drives a vehicle of any kind, as are the new road infrastructure projects that have been announced and the reductions in tolls for the Severn Crossing.
‘The bigger picture is that the economy isn’t doing quite as well as the Chancellor previously forecast and there is going to be some budgetary belt tightening. Our view is that while risk factors have undoubtedly increased, the economic outlook remains relatively optimistic if susceptible to potential shocks such as the outcome of the EU referendum and wider global economic trends. However, there is nothing here that will cause us to change our view that 2016 will be a strong year for the motor industry.’
Charlotte Halkett, spokesperson, Insure The Box:
‘The Government has put a very clear focus on getting young people into work. But it has to recognise that for many young people, being able to use their own car to get to and from their place of work is all part of that process. IPT was substantially increased from 6% to 9.5% from 1 November 2015, and yet another increase in the IPT was announced in today’s Budget – taking it up to 10% – which is hugely disappointing.’
James Tew, CEO, iVendi:
‘In motoring terms, the unexpected fuel duty freeze will probably gain the headlines but, for the motor industry, the message from this Budget is about the wider economic picture which, simply, is now not looking quite as rosy as even a few months ago. However, it is important to keep this in perspective – that the outlook is still that 2016 will be a very good year for dealers – but it perhaps does provide a timely reminder that we should all be keeping an eye on the ball and working hard to identify and convert every sales opportunity.’
Paul Stacy, founding director, Wunelli:
‘It is disappointing to find that the rate of IPT has increased again and will be 10%, from October this year, but also that the Chancellor has failed to see the bigger picture with regard to the societal benefits of removing IPT for usage based insurance.’
Matt Dyer, managing director, LeasePlan UK:
‘It’s reassuring to hear that the UK economy is on course to be the fastest growing economy in G7 this year. The automotive industry accounts for over £8.5bn to the economy and in 2015 the leasing industry accounted for half the number of new cars registered on the road.
‘We are extremely surprised by today’s fuel duty freeze. This is a welcome boost to UK households and businesses saving an average of £75 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 £270 per year.’
