Industry reacts to the Chancellor’s Spring Budget

Jeremy Hunt has delivered the last Budget before the general election

Industry reacts to the Chancellor’s Spring Budget

The Chancellor Jeremy Hunt has delivered his Spring Budget, calling it a “budget for long term growth”.

Here are the key points from the last Budget before the next general election:

Budget announcements relevant to the independent garage industry

  • National Insurance cut by 2p in the pound for employees and the self-employed
  • A freeze on the salary thresholds at which people start paying income tax and national insurance
  • Fuel duty frozen, with the extension of the 5p cut in duty on petrol and diesel for another year
  • VAT threshold raised from £85,000 to £90,000 from April
  • Covid-era loan scheme for small businesses extended until March 2026

Stuart James, CEO of the Independent Garage Association (IGA)

“The independent garage sector had hoped for strategic support from the government in this critical year of change.

“Unfortunately, the Budget missed several opportunities to address key concerns. Whilst we appreciate that this budget announcement has been heavily weighted to support consumers ahead of the impending general election, it is disappointing that very little has been mentioned regarding supporting SME’s, the backbone of the UK economy.”

You can read Stuart James’ comments in full here.

Kevan Wooden, CEO at LKQ UK & Ireland

“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 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.”

Mike Hawes, SMMT chief executive

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

“[The] 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.”

Steve Nash, CEO of the The Institute of the Motor Industry (IMI)

“Despite talking about encouraging investment in future technologies, today’s 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.

“For the UK to achieve its green ambitions every part of the automotive sector must be supported and that includes the aftermarket.

“Whilst the addition of leased assets in the Full Expensing 100 percent first year capital allowance may provide some businesses with help, it’s disappointing that the Super Deduction was not reintroduced. This would have provided the wider aftermarket with essential help to ensure it is adequately equipped and trained to support EV drivers.

“It was however encouraging to hear that the Chancellor intends to maintain the Back to Work plan and improve the Childcare offer to give more people who may have felt they couldn’t get back to work, back into the workplace. The IMI is working with automotive employers to ensure they can attract the most diverse workforce through our Diversity Task Force and the ‘There’s More to Motor’ campaign and we hope the government’s actions, including its intention for the National Insurance cut to encourage more people into the workforce, will help.”

“Cynics might say it was a budget for an election – sadly it seemed to miss the significance of how important the automotive sector is to the UK’s economic and social infrastructure as a whole.”

Gordon Balmer, executive director of the Petrol Retailers Association (PRA)

“I am pleased that the Chancellor has listened to us and extended the fuel duty freeze and the 5 pence per litre cut. This move is poised to ease the financial burden on motorists when they refuel and is likely to be well-received.

“PRA appreciates the government’s commitment to reviewing fuel duty rates and hope they will continue their efforts to alleviate the burden of high energy prices on motorists.”

”Unfortunately, the Chancellor did not take the opportunity to reduce business rates. With rates due to rise to an all-time high of 54p in the pound in April, petrol retailers face further financial strain. The proposed rise in business rates will only exacerbate the increasing costs petrol retailers have had to endure in recent years.

“The PRA remains committed to engaging with the government to ensure continued support for petrol retailers.”

Paul Hollick, chair, Association of Fleet Professionals

“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.”

1 Comment

  1. Hang on a minute he has to pay back all the money that they borrowed to pay all the worker’s in our trade on Furlough


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