Industry figures have dubbed a complete lack of any measures for the automotive industry in the Spring Statement, presented today by Chancellor of the Exchequer Rachel Reeves, as a missed opportunity to stimulate growth in the UK.
The British Vehicle Rental and Leasing Association (BVRLA) highlighted the Chancellor’s failure to reference the impending electric vehicle (EV) tax hikes or its recent ZEV Mandate consultation, at a time when the Association believes actions are needed to meet bold decarbonisation targets.
BVRLA chief executive, Toby Poston, commented that electric vehicle registrations have never been higher, but the fleet and mobility services sector’s confidence in a fast, fair and affordable net zero transition is wobbling. “Today’s Spring Statement failed to acknowledge or address the uncertainty and lack of confidence surrounding the electric vehicle market,” he said.
“Our current decarbonisation targets are at major risk unless policymakers deliver a comprehensive set of measures to drive long-term demand – the clock is ticking, and next week’s VED (Vehicle Excise Duty) hikes will see that pressure building,” Poston added.
John Cassidy, managing director of sales at Close Brothers Motor Finance, described the decision not to reverse plans to apply VED to EVs as adding another reason for buyers not to switch, at a time when private demand is not where it needs to be due to the initial costs of EVs, poor charging infrastructure and concerns over electricity bills.
“Applying VED to EVs provides one less incentive for buyers to make the switch – this will also make the Government’s targets, such as the Zero Emission Vehicle (ZEV) Mandate and the proposed 2030 ban on new petrol and diesel vehicles, harder to achieve,” Cassidy said.
Dealer disappointment
Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA), which represents franchised car and commercial vehicle dealers across the UK, criticised the lack of updates on some of the issues affecting the automotive retail industry.
“NFDA remains of the view that raising employer NICs (National Insurance contributions) by 1.2% to 15% will significantly increase the cost of running a franchised dealership, particularly at a time when businesses are already facing pressure from rising energy costs and adapting to the shift towards electric vehicles,” Robinson said.
“Furthermore, the Spring Statement did not provide an update on the electrification of the UK car parc. This transition provides a huge economic opportunity for the UK and the Government needs to be incentivising consumers to purchase a new vehicle, which will drive growth in the UK economy.”
Robinson added that the NFDA will continue to work with Government lobbying on behalf of franchised vehicle dealers.
One positive note was sounded by Cassidy, who described the Chancellor’s reconfirmed pledge to extend the freeze of fuel duty and a temporary five pence cut until March 2026, as “a glimmer of relief” to motorists.
“Whilst only likely to have a small positive impact, it’s a step in the right direction, particularly for the 35% of drivers who cite fuel prices as the biggest challenge in the next 12 months – and well over half (57%) of drivers say cars are becoming unaffordable,” Cassidy said.
He added; “Although we’ve seen a dip in fuel prices in recent weeks, fuelled by the supermarket price wars, the Government needs to ensure these cuts continue to reach drivers, fuel tanks and wallets.”
This story is being updated
