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Chancellor urged to back automotive industry in forthcoming spending round

The UK automotive industry has called on the Government to provide it long-term strategic - and financial - support ahead of the next spending round.

In its submission to the Treasury, the Society of Motor Manufacturers and Traders (SMMT) has challenged the chancellor of the exchequer, to commit to long-term funding through the Regional Growth Fund (RGF) and the Advanced Manufacturing Supply Chain Initiative (AMSCI).

Both funds have leveraged significant private sector investment throughout the UK automotive industry. A commitment to maintain the RGF and AMSCI initiatives as well as to continue their valuable support would provide the stability that businesses require to invest in the UK.

"The UK automotive industry is providing a significant boost to the UK economy, through strong new car sales, unprecedented levels of capital investment and rising manufacturing output. The drive to rebuild the UK automotive supply chain, increase automotive research and development (R&D), and bring innovative UK technologies to commercial maturity holds great potential for future economic growth and greater employment in UK automotive," said Mike Baunton, SMMT interim chief executive.

"To fulfil our potential and realise the short-term £3 billion supply chain opportunity in the UK, automotive businesses and motorists need long-term continuity of government policy and support.

"George Osborne has a unique opportunity to drive growth in a strategic sector for the UK economy, so it is vital that the forthcoming spending round supports our industry's growth potential through investment, innovation, low carbon vehicles and skills."

In addition to securing RGF and AMSCI funding, the SMMT suggests the chancellor focus and increase public spending on innovation and R&D in key strategic technologies.

"Highly fuel-efficient, low carbon technologies have major growth potential for global automotive companies as well as UK suppliers, SMEs and innovators.

Ring-fencing and securing an increased share of existing innovation funding on the five strategic technology areas identified by the Automotive Council will help secure a greater share for the UK in global automotive R&D spend and innovation capabilities.

To support the early market for ultra-low emission vehicles, the SMMT believes the spending round needs to deliver continued funding for the plug-in car and van grants.

Commitment beyond 2015 is needed to ensure consumer and business confidence to buy and drive these vehicles, said Baunton.

"Since the plug-in car grant was set-up in 2011, thousands of motorists have benefitted from the funding. But to achieve ambitious decarbonisation targets and deliver on air quality, consistent support for ULEVs through incentives and the taxation system is essential."

The SMMT also urged the chancellor to support the sector's drive to increase its talent stream by continuing national support for skills and apprenticeships at all levels. "This will help the industry address its urgent short-term gaps and boost the future prospects of the sector."

> The spending round is a Whitehall-led process to allocate resources across all government departments, according to the government’s priorities.

Spending reviews set departmental budgets for current and capital spending over several years. It is then up to departments to decide how best to manage and distribute this spending within their areas of responsibility.

This spending round allocates spending for just one year rather than for multiple years. Spending round 2013 will set departmental budgets for the financial year 2015 to 2016.

The chancellor will announce the results of the spending round on June 26.



 

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