Automotive industry labels Budget a ‘missed opportunity’

The automotive industry has offered a tepid response to the Spring Budget, announced by Chancellor Jeremy Hunt yesterday.

The industry had been calling for greater support for apprentices as well as consumer incentives to boost electric vehicle uptake, neither of which were forthcoming, although it was announced the 5p fuel duty cut would remain for a further 12 months.

Steve Nash, CEO of the Institute of the Motor Industry, described it as a ‘budget for an election but not for a greener environment,’ and said an opportunity had also been missed to tackle the skills gap.

He said: “Despite talking about encouraging investment in future technologies, the Spring Budget seemed to miss the opportunity to make some small changes that would support the widest automotive sector as it faces a continuing skills gap while trying to future-proof itself. There was also nothing done to encourage more people to move to lower and zero emissions vehicles.”

That view was echoed by both the Society of Motor Manufacturers and Traders (SMMT) and the National Franchised Dealers Association (NFDA).

Mike Hawes, SMMT chief executive, said: “Government has been keen to assure the UK automotive industry’s competitiveness, with support for EV development and manufacturing – including £2.1bn in autumn’s Advanced Manufacturing Plan – but there is little to help consumer demand.

“The Spring Budget is, therefore, a missed opportunity to deliver fairer tax for a fair transition. Reducing VAT on new EVs, revising vehicle taxation to promote rather than punish going electric, and an end to the VAT ‘pavement penalty’ on public charging would have energised the market. With both government and industry having statutory requirements to deliver net zero, more still needs to be done to help consumers make the switch.”

Meanwhile, the Sue Robinson, chief executive of the NFDA, said: “The NFDA had urged the government to introduce incentives to prevent EV sales from flatlining. Noticeably, fleet has been driving sales of new cars rather than private buyers. The government must do more to help maintain momentum in the private BEV market and increase adoption of these cleaner vehicles across the UK.”

Robinson also said a lack of support for apprenticeships was a significant omission.

She said: “The sector is grappling with an intensifying skills shortage, which a reform of the Apprenticeship Levy could help alleviate. NFDA has consistently called for the government to remove the claw-back cap and simplify the application process. There certainly were a few missed opportunities in this Spring Budget.”