The Society of Motor Manufacturers and Traders (SMMT) has set out what it wants to see in the Budget on March 23, including certainty on motoring taxes, a freeze on fuel duty and measures to support business investment.

The SMMT wants the Chancellor of the Exchequer to assist business growth and to boost consumer confidence when he announces details of the Budget.

Paul Everitt, SMMT chief executive, said: “The manufacturing sector is leading economic recovery and the Government must use this Budget to sustain and enhance this position.

“This Budget comes at a critical time for the UK automotive industry and we’re urging government to deliver the right mix of supportive policies to secure sustainable growth and strengthen the role of the UK as a leading developer, producer and exporter of automotive products.”

SMMT expects consistent growth across the automotive sector by 2012 but to ensure and sustain this, “positive government action is essential”.

In its submission, the SMMT set out the steps it believes the Government should take to promote sustainable growth in the automotive sector as a key part of the UK’s economic recovery.


Corporate measures:

To promote business growth, the SMMT believes the Government should:

  • Continue to put pressure on banks and the finance community to improve access to working capital, investment finance and credit guarantees.
  • Restructure the R&D tax credits regime to make it work better for high value manufacturing and incentivise increased R&D spending by the automotive industry in the UK. 
  • Enhance the capital allowances system to acknowledge the capital intensity, global footing and cyclical risks of the automotive sector.
  • Review business rates to ease regulatory costs on the manufacturing sector and make UK operations internationally competitive.
  • Provide greater clarity on how environmental taxes and commitments are applied to businesses to retain competitiveness.
  • Realise the growth opportunities from international trade, exports and inward investment by adopting a consistent trade policy that supports manufacturing.
  • Attract international investment and help UK-based businesses to compete on a global playing field by making sure tax regulations are globally competitive.
  • Build on UK engineering and academic excellence by working to integrate university and industry research and development.
  • Support the work of the Automotive Council by improving coordination of public and private activities and supporting its recommendation for the sector in policies and programmes.

Consumer measures:

With a significant squeeze on business and household spending, SMMT recommended that the Government should:

  • Relieve the immediate financial pressure on businesses, fleet operators, hauliers and motorists by freezing fuel duty.
  • Deliver stability and certainty to motorists by not raising duties on vehicles beyond levels set in the 2010 Budget. 
  • Remove the first year VED rate. 
  • Urgently implement a scheme to incentivise the purchase of low carbon commercial vehicles.
  • Set out a durable and consistent set of measures or incentives to support the uptake of alternative fuels.
  • Put in place long-term commitments to support low carbon infrastructure development to enhance consumer and business confidence in low carbon technologies.
  • Consider a means of assessing VED for commercial vehicles based on age and environmental status to incentivise the adoption of the most efficient vehicles.
  • Remove the unjustified three percentage point penalty on diesel company cars.

The Budget will take place next Wednesday (March 23).