Spring Budget 2017 Announced: How Will it Affect the Automotive Industry?
The Society of Motor Manufacturers and Traders (SMMT) Chief Executive, Mike Hawes, criticised the government for failing to add additional funding for supply chain developments within the motor industry, after the Spring 2017 Budget was announced last week.
Speaking on behalf of the UK automotive industry, Hawes said: “UK Automotive plays a critical role in the country’s economy but future success will depend upon maintaining competitiveness.
“It’s disappointing, therefore, that the Chancellor hasn’t prioritised additional funding for supply chain development, nor addressed the flaw in business rates that disincentivises investment in plants and machinery.”
However, Hawes wasn’t critical of every announcement made by Chancellor of the Exchequer and did praise new measures to ease congestion as well as added funding for the design and development of battery technology. These were measures aimed at tackling the issue of pollution, which is something the automotive industry has also been considering.
“The automotive industry is investing significantly in new technology to address the issue of air quality so we look forward to working with the government to encourage the uptake of the latest, low emission vehicles regardless of fuel type,” added Hawes.
He also praised the government’s moves to improve technical education saying, “the focus on technical education is welcome as we seek to fill the 5,000 vacancies that exist in our sector and invest in skills to improve productivity still further.”
Chancellor Philip Hammond, who announced the Budget, also revealed that Vehicle Excise Duty (VED) rates for cars and vans registered before April 2017 would be increased from April 1st by the rate of inflation.
Corporation Tax is also set to fall with the main rate reducing to 19% from 20% in April 2017, before falling to 17% in 2020/21.
The government has also committed to investing £270 million into so called ‘disruptive technologies’ which include driverless vehicles, biotech and robotic systems. The aim is to keep the UK at the forefront of these technologies going forward.
New measures to tackle traffic congestion, as mentioned by Mike Hawes previously, included investments given to local authorities to tackle pinch-points on the national road network. This included a £90 million investment for the North, and £23 million for the Midlands, to work on improving congestion on the roads.
The Chancellor also stated that fuel duty would remain frozen for a seventh year running. Speaking to The Express, Steve Gooding, the RAC Foundation director, said: “With pump prices having gone up 20 per cent in a year, the continued fuel duty freeze will be a huge relief to the country’s 38 million drivers, including the two-thirds of workers who commute by car and those people who live in the one million poorest households where around a fifth of weekly expenditure is on a vehicle.”
He then added: “But we shouldn’t feel too sorry for the Chancellor. He still receives 65p out of every £1 we spend on petrol and diesel.”