Motor Industry Reacts to the Budget

Mar 29 2011

Reaction from the car finance and fleet industries to Chancellor Osborn´s latest "motorist´s budget" has on the whole been fairly positive.  There are those, however, who have doubts about the long-term benefits motorists can expect to derive from the budget.

ohn Lewis, Chief Executive Officer of the British Vehicle Rental and Leasing Association, is highly positive about the budget.  According to him it held only good news for car finance drivers.  He says that the abandonment of the 1p increase in fuel duties from April was widely expected, but that the Chancellor surprised everybody by postponing the inflation increase until 2012 and by actually reducing the fuel duty by 1p a litre.  He considers the "fair fuel stabiliser" the Chancellor announced an ingenious way to shift the taxation burden upstream when there is an increase in the price of crude oil.

Speaking on behalf of the car finance industry, Chris Sutton, Managing Director of Black Horse said that he also welcomed any move towards lower motoring costs.  He warned, however, that there was unlikely to be any long term benefits for the car dealer market.

Sutton continued "Any moves by the Government to ease the costs of motoring has to be good news, both for businesses and consumers...but I think it´s unlikely this Budget will have a major effect on dealers´ businesses or the availability of finance in the short to medium term."

Mark Sinclair, Director of Alphabet, looked at things from a fleet perspective.  He said that the budget would not result in any significant long term savings; it will simply link increases in the fuel levy to the rate of inflation - which was currently more than 100% above the Government´s target.

Author: Louise Hutchinson

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