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Motor industry calls for Budget support

10/06/2010

Motor industry body the Society of Motor Manufacturers and Traders (SMMT) has set out its own priorities for the upcoming 'Emergency Budget'.

Chief executive Paul Everitt has written to Chancellor George Osborne ahead of the 22 June announcement, calling for the Budget to deliver long-term stability to the industry, delivered through business confidence and "certainty on motoring taxes", along with what he termed "a collaborative approach to sustainable growth".

Everitt argued that these aims could be achieved through improving access to credit, keeping in place existing loan guarantees, linking fuel duty to oil market trends, and providing "consistency" in tax credits associated with the development of new technologies.

The case of fuel taxation was addressed by the Conservatives ahead of the May General Election - through the so-called 'fuel duty stabiliser' - but seems to have fallen by the wayside in recent announcements.

Meanwhile the SMMT renewed its criticism of Government policy on Vehicle Excise Duty - which in April was re-configured to apply greater charges to the most polluting cars. It recommends that the Government "build confidence in the VED regime" by assessing how taxes are received by car buyers "over a period of stability".

The SMMT's letter comes just days after it revealed that car sales had risen for the eleventh successive month.

"The potential for growth in the automotive industry makes the sector crucial to the UK's long-term economic development," Everitt wrote.

"It is vital [that the] Government takes the necessary steps to nurture business and consumer confidence.

"There are undoubtedly tough times ahead and Government action to ease access to affordable finance will help support private sector investment in important skills and technologies needed for the long term."

Meanwhile, David Cameron confirmed during prime minister's questions on Wednesday that the Government would approve the £20 million loan to carmaker Nissan to help it develop its Leaf electric car in Sunderland.

There were fears that the loan - which had been agreed by the Labour administration - would be withdrawn as the current Government reviewed the spending decisions of the previous administration, in a bid to slash £6.2 billion from its budget.

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