The Society of Motor Manufacturers and Traders today urged Chancellor Gordon Brown to bring a stable currency and lower taxes to the motor industry in his pre-budget statement tomorrow.
The industry's submission comes amid concerns of unfavourable exchange rates and a growing tax burden, making it difficult for manufacturers to remain competitive and hitting their exports.
Nearly 80% of all UK-built vehicles are exported to mainland Europe. Manufacturers favour early entry to the euro and the industry supports the government's commitment to a clear timetable during this parliament. Any further delay would have a serious impact on an industry whose exports have already been affected by the strength of sterling, says the SMMT.
The SMMT supports the Government's primary focus on stabilising the UK economy and recent cuts in interest rates are welcome. However further cuts will be necessary to sustain the economy and minimise further erosion of the UK manufacturing sector - particularly component suppliers - caused by the strength of sterling and high taxes. Motor manufacturers have also warned of 'crippling' costs and falling inward investment if the government fails to implement the End of Life Vehicles (ELV) Directive fairly. It is essential that the two key dates for the introduction of cost-free vehicle take back are respected in UK laws; 2002 for new vehicles and 2007 for cars already on the road.
On the ELV issue, SMMT chief executive Christopher Macgowan said: “Of all the issues the industry faces in 2002, implementation of this directive may be the most important. The potential to get it wrong is huge. The government must follow the lead already taken by France and Germany, and respect the two key dates in the directive."