Just what impact has the Autumn Statement had on the automotive sector?

Just what impact has the Autumn Statement had on the automotive sector?

Professional Recovery Editor Dave Gregory picks the bones out of the recent spending review and highlights how it will effect the automotive sector in 2016.


The recent Autumn Statement set out the state of the UK economy, and is in effect a mini-Budget in which changes to fiscal policy are signalled.

The Spending Review is a process by which the Government determines how public money will be spent over the course of the Parliament (and in effect determines Government Departmental budgets). DfT, along with a number of other Departments including DCLG, had already signed up to 30% of funding cuts.

In September, the Chancellor wrote to the Office for Budget Responsibility (OBR) asking them to publish a forecast on 25 November and making this a joint Spending Review and Autumn Statement.

So how has the Chancellor’s Spending Review impacted on the automotive sector?

There were concerns raised that the Chancellor would take the opportunity to raise fuel duty by 1 or 2George Osbourneppl which would have provided almost £1 billion extra revenue for the Treasury over the next 12 months.

There was also speculation that he might increase the tax on diesel vehicles in an attempt to drive companies and motorists away from diesel vehicles in the wake of the recent emissions scandal.

Brian Madderson, Chairman of the Petrol Retailers Association (PRA), received confirmation from the Treasury that fuel duty will remain at 57.95ppl on both grades until 31 March 2016 as announced in the Spring Budget.

He commented; “This is reassuring for motorists and businesses that are leading our economic revival.  Road fuel volumes increased by over 1.1% for the first half of 2015 compared to last year, and so the Chancellor is obtaining extra revenue of £300 million a year to help with funding in other areas.

“The Treasury monitors fuel taxation, usage and duty levels on a regular basis so we have to wait until next year’s Spring Budget for the next announcement on duty”.

The RMI also saw the Spending Review as a positive move when they welcomed the Chancellor’s confirmed commitment to ‘rebuilding Britain’ and an industrial strategy for the automotive sector for a decade.

“Also it is positive to see the extension of the small business rate relief scheme for a further year which will benefit 600,000 small businesses”, said Sue Robinson, RMI Director.

The RMI welcomes the Chancellor’s announcement to raise the apprenticeship levy by £3bn a year. There will be £15,000 allowance, so 98% of employers will not pay.

This will in turn encourage small businesses to take on more apprentices.  Government hopes to increase funding and raise the number of apprentices to three million by 2020.

RMI Director Stuart James comments: “The RMI supports the levy in the context that apprentices will now have the right levels of funding to ensure quality training and development to grow into highly skilled technicians. Government money alone could not have funded this. We still need further answers for SME’s, as they make up the vast majority of the UK’s car repair businesses.”

Sue Robinson was also encouraged by the removal of the diesel supplement from company cars: “It is also beneficial that the removal of the diesel supplement from company cars will be delayed until 2021 ahead of the new EU testing regulations, and that Ultra-low emission vehicles will continue to be supported.”

With forecourt crime costing the economy an estimated £40million a year, petrol retailers across England and Wales have been threatened by police authorities refusing to investigate ‘drive-offs’ and other forecourt crimes if budget cuts were implemented.

Brian Madderson, Chairman of the Petrol Retailers Association (PRA) commented: “The PRA welcomes the announcement of the maintenance of police budgets, following news that the Home Office recently established a Forecourt Crime Senior Steering Group with funding for at least 12 months.

“Forecourt crimes are most often committed by regular offenders, leading on to major theft and violence.

“We are meeting with The Rt Hon Mike Penning MP, Minister of Crime and Policing to discuss measures that will significantly address this issue and now there will be a more positive approach.

“We look to real support from police authorities to eradicate this problem and our retailers will work positively with police through their forecourt CCTV systems to provide a real insight on serious criminal activity.

“The PRA believes that this should be a win – win situation both the police and retailers.”