Automotive group issues wishlist to Chancellor

AUTOMOTIVE trade body The Society of Motor Manufacturers and Traders has said the Chancellor must use the Budget to sustain growth in the UK’s wealth-generating motor industry.

The SMMT said it was necessary for the Government to deliver on taxation reforms, particularly on the important R&D tax credit system promised in the Autumn statement.
It also has to act on its growth strategy and sustain consumer confidence, added the body.

Addressing a meeting of the All-party Parliamentary Motor Group, which focuses on the outlook for automotive, the SMMT said there had been a £4bn investment in the motor industry last year and this had to continue.

It stressed the need to attract long-term investment in R&D, advanced skills, capital equipment and new model production in order to remain globally competitive.

Paul Everitt, SMMT chief executive, said: “The UK motor industry has made steady progress during the last 18 months with increased production, substantial new investment and growing exports.

“The Budget must help to sustain this by encouraging long-term investment in skills, R&D and capital equipment. To make the most of new and emerging opportunities the Chancellor must progress the R&D tax credit reform, increase capital allowances and avoid any further squeeze on hard-pressed businesses and consumers.”

The SMMT has also called for stability and certainty on motoring taxes, and has urged greater incentives – such as the Plug-In Car and Van Grant – to move business and retail consumers towards more efficient and low carbon technologies.

The society reiterated the need for continued business investment and easing access to funding. In its submission to the group, it set out the steps it believes government should take to promote sustainable growth in the automotive sector as a key part of the UK’s economic recovery.

This includes:

•    Finalising R&D tax credit reform in order to attract further investment in R&D facilities in the UK.
•    Enhancing the Capital Allowances system to acknowledge the capital intensity, global footing and cyclical risks of the automotive sector.
•    Continuing to put pressure on banks and the finance community to improve access to working capital, investment finance and credit guarantees.
•    Reviewing Business Rates to ease regulatory costs on the manufacturing sector and make UK operations internationally competitive.
•    Reducing the complexity of energy efficiency regimes to restore confidence and stimulate business investment.
•    Realising the growth opportunities from international trade, exports and inward investment by adopting a consistent trade policy that supports manufacturing.

It added that with a significant squeeze on business and household spending, measures should also be introduced to help consumers.

These include:

•    Delivering stability and certainty on motoring taxes and duties.
•    Supporting incentives to encourage the use of electric vehicles and the uptake of alternative fuels.
•    Reassuring business fleets that the company car tax regime remains clear and consistent so users can confidently make future car plans.