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THE Chancellor’s autumn budget brought little of interest although the freezes on both fuel and vehicle excise duty for heavy goods vehicles have been welcomed.

Peter Golding, Managing Director at FleetCheck, said these would probably have marginal impact bearing in mind current rising costs in all kinds of areas. He added: “The money allocated to funding truck roadside facilities is also interesting, and perhaps shows the government is listening to at least some of the concerns of drivers and managers, but is unlikely to be enough to make much of an impact on the ground.

“Really, the best news from the Chancellor is that the economy now appears to be on a relatively sound footing bearing in mind what we have been through over the past 18 months, but there remain a whole range of difficulties that are going to continue to impact heavily on fleet operations for some time to come. Whether the Budget is sufficient to head off these threats remains to be seen.”

Paul Hollick, chair, of the Association of Fleet Professionals said: “Certainly the freeze in fuel duty is welcome but not unexpected given the rate of petrol and diesel increases seen in recent months, and the additional funds that have been made available for kerbside charging are welcome but were leaked long in advance.

“There are some areas of disappointment. The biggest of these is the absence of benefit-in-kind taxation tables for 2025-26, for which we’ve been campaigning and remain an issue for fleets embarking on electrification. We would also have welcomed any sign of future discussion on the Government’s future thinking on road pricing, but it appears that conversation remains some way into the future.”

“In a wider sense, the good news is that the economy is a relatively good place following Covid – or at least in a better place that could’ve once been expected – although there remains a long list of significant problems, from the semiconductor shortage to the emerging impact of Brexit.”

AA President  Edmund King, AA president, said that while the fuel freeze will bring some ‘pump relief’, the “pain of record petrol prices remains”.
He added; ““Our research suggests that when fuel prices are high, lower income drivers cut back on general household expenditure, including food and heating, to keep their cars on the road. Freezing duty will help these drivers. We will though be looking for more fiscal and infrastructure incentives to support our COP26 positioning to ensure that the UK ‘gets electric done’ as soon as possible. Fleets and company car drivers have a vital role as their new EVs soon find their way onto the used car market.”
Background on fuel prices:

  • Pre-pandemic, petrol was 122p and diesel 125p a litre. Both were falling. Now they are 143p and 146.5p a litre.
  • The 21p difference includes 3.5p extra in VAT. That’s more than the 2.84p scheduled increase in fuel duty hence the Chancellor is still taking more tax from drivers.
  • Fuel duty frozen for 12th year

Sue Robinson, Chief Executive of the National Franchised Dealer Association said the Chancellor Rishi Sunak announced a number of measures in line with the requests previously made by NFDA in its spending review submission and consultation response. These include a one-year 50% discount up to £110,000 on business rates for retail, leisure and hospitality businesses and a new improvement relief for investment in green technology.

Additionally, in line with NFDA’s requests: the business rates system will be evaluated every three years; the Valuation Office Agency will receive a substantial increase in funding and next year’s Business Rates Multiplier will be cancelled.

Robinson said: “The business rates discount will be crucial to continue to support businesses as they complete their recovery. Going forward, we will continue to liaise with the relevant departments to go further in addressing the imbalance between online tax and the rates paid by businesses relying primarily on their physical presence such as vehicle dealerships”.

Nick Bowes, Chief Executive at Centre for London said that the Chancellor’s  ‘new age of optimism’ needed a strong environmental focus, adding: “we needed to hear much more from the government on how we are to successfully transition to a net zero economy, but instead heard headline announcements of a cut to domestic flight duty and cancelled increases in fuel duty.”

James Tew, Chief Executive at  iVendi, said: “So much of the Budget was leaked beforehand that there were few surprises and really the most interesting parts were the macroeconomic forecasts that showed, by and large, that the economy has weathered the effects of Covid really quite well.

“In itself, that is the best news for vehicle retailers in the UK. Despite that, there are a whole host of potential downsides in play – from the forecast 4% inflation for next year through to the ongoing effects of Brexit and the semiconductor shortage – that were not really tackled in any meaningful way. If there are any threats to the new and used sectors in the short and medium term, this is where they will lie. However, our overall view remains that the market should be able to maintain momentum very close to its current level.”

Paul Burgess, CEO, Startline Motor Finance, added: “There’s quite a lot of economic news in the Budget that, even looking back just a year, we would very much have welcomed in the midst of the pandemic. Growth is higher than expected, unemployment has remained relatively low, and government debt appears to be high but under control.

“On the other hand, there is no denying that the economy continues to suffer from the effects of Covid, Brexit, the semiconductor shortage and more. The impact of all of these factors is difficult to predict over time and, in addition, it seems very likely that many people will find their personal spending power noticeably reduced over the coming year and longer, especially given that inflation is expected to be higher than 4%.

“From a motor finance point of view, we don’t believe these represent specific threats to the current buoyancy of the used car market and expect a strong 2022 – but it should definitely be noted that the road ahead for the general economy could be pretty bumpy.”

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