BVRLA: Spring Budget not green enough
British Vehicle Rental and Leasing Association believes Chancellor Philip Hammond missed the mark with his Spring Budget yesterday, saying it sends mixed messages to the wider industry.
BVRLA chief executive Gerry Keaney said, ‘Mr Hammond’s first and last Spring Budget was the perfect opportunity to create a fairer, simpler tax system that incentivises the uptake of ultra-low emission vehicles. We are now left with company car tax and VED regimes that do little to support the government’s green agenda or tackle the growing air quality crisis.
‘At the moment, a 20% taxpayer choosing between a pure electric BMW i3 and a hybrid Mitsubishi Outlander – both of which have similar P11d values and sit in the same tax band – will pay the same company car tax over the next three years. The current regime provides no incentive to choose a pure electric vehicle until 2020. The BVRLA’s call for the government to bring the introduction of the new two per cent rate forward from 2020 to 2017 would incentivise drivers to choose cleaner cars now.’
On the subject of Vehicle Excise Duty, he added, ‘The Chancellor chose not to defer the introduction of new Vehicle Excise Duty rates which come into force next month. As a result, the car hire industry will see its first year VED bill rise by almost 400% in 2017. Firms will also be unable to claim back £1.67m every year in legitimate refunds. Car rental companies operate the newest fleet on UK roads, and the average rental car is just eight months old. The sector purchases around 324,000 cars each year, but this number is now likely to fall as our members lengthen their operating cycles in an attempt to reduce the cost impact of the new VED regime.’
Meanwhile, the Chancellor announced £90m and £20m for the north and Midlands respectively to tackle pinch-points on the Strategic Road Network. This was supplemented by a wider £690m competition for local authorities to tackle urban congestion.
Gerry Keaney said, ‘We look forward to hearing more about these funds from the Department for Transport in due course.’
The association also welcomed the Chancellor’s decision to freeze fuel duty for the eighth year in succession, as well as freezing both the VED rates for hauliers and the HGV Road User Levy for another year.