MAY 2023 AFTERMARKET 13 was a Budget more noteworthy for what it didn’t include rather than what it did. We’d have liked to have seen measures announced ranging from the creation of an EV charging regulator through to national coordination on Clean Air Zones, as outlined in our recent tax and regulation manifesto. However, there was little content that showed the government has been thinking about business road transport. “The one bright point for fleets was the freeze in Fuel Duty. An increase in 11 pence per litre would have been extremely unwelcome at a point in time when the economy is struggling and removing that possibility is very much welcome. Further positives are difficult to identify but a recognition that more people need to be encouraged back into the workforce, through pension changes and childcare measures, could potentially help to a degree in a fleet sector where recruitment remains an issue.” Relative strength Philip Nothard, Chair at the Vehicle Remarketing Association, noted: “Really, what the remarketing sector is overwhelmingly looking for from the government after the events of the last few years – the pandemic, the war in Ukraine, the domestic economic chaos we saw late last year – is a stretch of stability that allows the relative strength that we have seen in the used car and van sector to continue. The Budget probably delivers on that. There is little drama in its contents but measures such as the retention of the £2,500 energy price guarantee should mean that the cost of living crisis will at least become no worse, if not improve. This should mean consumer confidence remains stable, something helped by the forecast of avoiding technical recession. “For motorists in general, the freeze in Fuel Duty and additional help for potholes are both welcome while the childcare and pension measures designed to get people back into the workforce are good ideas which, given the labour shortages that we are seeing across remarketing, may have a positive effect. “Finally, we have been highlighting the need for some form of support in the used market for electric vehicles and there was no news in that area, but we remain hopeful that the government are listening to the points we are making and will take action relatively soon. This is something that is very much needed to ensure the smooth electrification of the used EV sector.” Measured approach Paul Burgess, CEO at Startline Motor Finance, broadly welcomed the steady-as-she-goes approach of Jeremy Hunt’s Budget: “For the retail motor industry and motor finance specifically, this is a relatively benign Budget without any moves that will either noticeably boost or harm prospects. Really, it’s hallmark is an extremely measured approach, as seen in the decision to extend the energy price guarantee by three months in order to not worsen the cost of living crisis. The economy is performing just a little better than expected at the end of last year and there seems to be a mood of gently trying to ensure that trend continues, with great store placed on avoiding recession. “It’s important to remember that it is only seven months since the fated mini-budget and this is a Budget very much about being seen to make no sudden, dramatic moves and convince onlookers that the Sunak administration is one that is, above all else, fiscally responsible. Recent news about bank collapses in the US and the plight of Credit Suisse does raise the possibility of more unanticipated shocks hitting the economy, so this cautious approach is perhaps understandable, even if there is a strong argument for a more strategic and proactive approach on growth than the measures the Chancellor revealed.” Looking specifically at the ongoing fuel duty freeze, PRA Executive Director Gordon Balmer said: “Petrol and diesel prices are still extremely volatile due to the ongoing war in Ukraine. Many motorists will breathe a sigh of relief at the Chancellor’s decision to extend the fuel duty freeze and maintain the 5 pence per litre cut. We welcome the government’s commitment to keep fuel duty rates under review and hope that they will continue to do all they can to ease the burden of high energy prices on motorists. As always, our members are committed to keeping their communities fuelled and fed.” Welcome news Graham Conway, Managing Director at Select Car Leasing, also welcomed the continued freeze on fuel duty: “We wholly welcome the Chancellor’s announcement on fuel duty. The poorest families, as well as businesses operating a fleet of vehicles, would be hit the hardest by any rise in the price of fuel. For many people who are really feeling the effects of the cost of living crisis, such a price hike could have tipped them over the precipice in terms of their own budget. “The Chancellor’s decision to extend the cut to Fuel Duty will come as extremely welcome news to motorists and businesses across the UK that rely on traditionally-fuelled vehicles for their essential travel. It’s interesting to note that the continued freeze on Fuel Duty actually goes against what some experts were forecasting. In November last year, the Office for Budget Responsibility (OBR) predicted a 23% rise in Fuel Duty, which would have increased the price of petrol and diesel by around 12 pence per litre. The extension to the cut means financial relief for millions of drivers.” James Tew, CEO at iVendi added: “The key economic threat to the retail motor industry over the last year or so has been the possibility that the new and used car and van sectors would be badly hit by the cost of living crisis. So far, however, effects have been limited, and the main plus point from the Budget is that the government seems to recognise that it’s important personal finances are not allowed to get much worse, as seen in the three month extension to the energy price guarantee. While they may insist that today’s measures were largely about growth, the underlying message is one of stability. This, in itself, is welcome after the various economic and social storms we have all had to weather in recent years but there is also perhaps an absence of really big ideas to get the economy moving, despite a basket of smaller scale, targeted measures designed to promote growth.” Government still does not entirely understand the significance of incentivising motorists’ transition to electric and investing into charging infrastructure ”
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