Budget 2024 reaction from the Automotive Industry
See below the immediate reaction to the Budget Statement 2024 by the Rt Hon Jeremy Hunt MP, Chancellor of the Exchequer presented to the House of Commons on 6th March 2024. This article will be updated as more reaction reaches us.
Kevan Wooden, CEO at LKQ UK & Ireland, said: “Garages and workshops will find few gifts for them in the Spring Budget - with the Chancellor largely focused on addressing the consumer tax burden, while continuing to toe a cautious line on public spending as the economy gets back on track.
“A handful of the industry’s smallest players will benefit from the threshold for VAT registration increasing from £85,000 to £90,000. This could help to free-up vital cash for investment in the skills and equipment needed to supercharge growth. But the rise falls short of the £100,000 threshold that many small businesses had hoped the Chancellor would stretch to.
“The decision to make full expensing permanent, representing a £10 billion tax cut for businesses looking to invest in equipment and machinery, was warmly received in last November’s Autumn Statement. So, new intention to extend full expensing to leased assets will be similarly welcomed by garages and workshops wanting to invest in new electric vehicle (EV) or ADAS servicing equipment.
“However, it was a budget that felt more in favour of ICE then EV, with fuel duty frozen and no new incentives to help motorists to switch to plug-ins. Despite this, the transition to electric vehicles continues to be the direction of travel for the industry, being the present for many garages and workshops getting ahead of the competition. It will still be prudent for the industry to invest in the skills and equipment to service electric vehicles sooner rather than later to ensure their long term success.”
Peter Golding, managing director, FleetCheck, said:
“This was a political Budget concentrating on giveaways to voters, which is perhaps understandable given the proximity of the general election and the current state of the polls. However, there was very little in there for businesses of any kind and especially for those operating fleets, except for the ongoing fuel duty reduction freeze. It really does feel as though our sector is now waiting for what now seems a likely change of government, and the opportunity to engage the new administration in dialogue about what we would like to see from them in terms of future developments in all kinds of areas from electrification to driverless cars.”
Paul Burgess, CEO, Startline Motor Finance, said:
“Overwhelmingly, this was a Budget aimed at voters rather than businesses, with the general election only a matter of months away. We carried out some research a couple of weeks ago that showed what motorists overwhelmingly want from the next government – whoever that turns out to be – is to resolve the pothole crisis and bring down fuel costs. The chancellor has maintained the longstanding fuel duty freeze and recent reduction, so there is an argument that they have at least listened a little, but whether any of this is sufficient to turn the political dial in their direction after a long period when polling has indicated that most voters feel it is time for a change, is very much open to question.”
Budget statement from James Tew, CEO, iVendi:
“With the used car market in reasonably strong health and yesterday’s figures showing that the new car market had its best February for 20 years, it’s probably unlikely that the government was ever going to provide any new forms of support for our sector in this Budget, even if there are various voices asking for more help during the process of electrification. Really, the bigger issue is the general state of the economy and there was little here to change the view that has developed over recent months. While the reduction in National Insurance might make a few people more likely to swap their car, the truth is that we appear to be in the middle of a long period when growth is flatlining, and general consumer and economic confidence is similarly, largely in check. Whether the general election later this year will start to change that situation and bring a degree of optimism is an unknown.”
John Rawlings, Consumer Editor at Carwow, said:
“While it is positive to see that the Chancellor has announced the fuel duty freeze will be extended for another 12 months, motorists were really hoping for more investment in the UK’s electric vehicle charging network and incentives to encourage private consumers to buy EVs.
“Carwow’s pre-budget poll showed that motorists want to make the switch – 38% are considering an EV for their next car – but the lack of charge points is a real issue. Polling last week revealed that ‘more EV charge points’ was top of motorists' Spring Budget wish list – 59% said this would be their top priority vs 56% who said a fuel duty freeze – so this lack of action on this issue will do nothing to improve their confidence.
“Motorists need to trust that the transition to EVs is being supported by policymakers as they decide which car they’ll be choosing next, so today’s decision to focus on fuel duty over EV improvements is a real missed opportunity by the Chancellor.”
James Lett, Technical Editor at Autodata, says:
“Across the UK there’s a widening skills gap amongst car technicians not having the skills or tools to repair EVs. Without government support, garages and auto technicians are being left behind in the EV revolution.
“The IMI predicts a shortfall of over 29,767 technicians in 2035, the same year the ban on new combustion engine vehicles being sold has been extended to. Like many in the industry, we had high hopes that the Spring Budget would recognise the need for critical investment and support.
“A million EVs are already on the road, but they can only be serviced or repaired by technicians with specialist training and tools. Neither of these are cheap nor do we see any government investment to change that.
“Not only are garages are losing money by turning down business, EV drivers can’t access the services they need to safely be on the road. It’s a catch-22 situation that cannot continue.
“The truth is clear, the EV revolution cannot happen if the backbone of the automotive industry keeps being forgotten about. Grant garages and technicians the support they desperately need.”
Paul Hollick, chair, Association of Fleet Professionals, said:
“There’s some mixed feelings here. In a lot of ways, one of the wins this government can claim over the last 14 years is its commitment to electrification, and the impact that its policies have had on the fleet sector in terms of moving to zero carbon emissions have been marked and dramatic. However, the truth is that more assistance in this area is now required – especially when it comes to van electrification where there are fundamental issues to overcome as well the need for a further increased rollout of charging infrastructure – and there was no sign of that help arriving at any time soon. While minor moves such as the continued reduction of fuel duty is welcome, we very much hope to see more from whoever is in power following the next general election.”
Fiona Howarth, CEO of Octopus Electric Vehicles, comments: “Salary sacrifice has supercharged the UK’s transition to electric driving, making electric cars cheaper than their petrol equivalents. Clarity around low Benefit-in-Kind (BiK) tax rates for EVs beyond 2028 is critical for consumer confidence and to keep up the momentum in the EV roll-out. Not clarifying the rates in the Budget is a missed opportunity.
“Following the recent 2035 rollback, drivers need clarity, not confusion, on tax rules to help make the decision to switch to an EV. Salary sacrifice is the most cost effective and easiest way to get a new EV, and demand has been through the roof.
“In the last year, Octopus has delivered over 10,000 vehicles, with 4,500 businesses signed up to offer their staff a brilliant sustainable benefit. Leasing through salary sacrifice can help drivers upgrade their cars, improve their driving experience, enjoy the latest tech and save money on fuel, and on top of that they can also switch out after a few years for the latest tech.
“We’re on a journey to zero emissions transport, and through cost saving schemes like salary sacrifice, we can keep up the pace.”