The Society of Motor Manufacturers and Traders (SMMT) has urged the Government to deliver taxation reforms and to sustain consumer confidence in its Budget next week.

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

It also reiterated the need for continued business investment and easing access to funding.

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.”

In its submission, the SMMT 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.

Corporate measures:

To promote business growth, Government should:

• Finalise R&D tax credit reform, attracting further investment in R&D facilities in the UK and communicate the upfront ‘above the line’ credit effectively.

• Enhance the Capital Allowances system to acknowledge the capital intensity, global footing and cyclical risks of the automotive sector.

• Continue to put pressure on banks and the finance community to improve access to working capital, investment finance and credit guarantees.

• Review Business Rates to ease regulatory costs on the manufacturing sector and make UK operations internationally competitive.

• Reduce the complexity of energy efficiency regimes to restore confidence and stimulate business investment by reducing the burden.

• Realise the growth opportunities from international trade, exports and inward investment by adopting a consistent trade policy that supports manufacturing.

Consumer measures:

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

• Deliver stability and certainty on motoring taxes and duties. This is not the time for short term radical changes, or substantial rate increases.

• Support a durable and consistent set of measures or incentives to support the electric re-charging and servicing infrastructure and uptake of alternative fuels.

• Reassure business fleets that the company car tax regime remains clear and consistent so that car users can confidently make future car plans.