Spring Statement 2022 Comment

Responding to the Chancellor’s Spring Statement, Matthew Walters, Head of Consultancy Services and Customer Value at LeasePlan UK

On the economic forecasts

“After two years of pandemic, this was already a challenging time. But now, as the Budget’s economic forecasts suggest, businesses and individuals face new challenges born of global uncertainty and rising prices.

“However, the fleet industry is well placed to overcome these challenges. Not only did we account for half of all new car sales in 2021, but we are also leading the adoption of the cleaner technologies that will define motoring’s future.”

On the Fuel Duty cut

“We strongly welcome Rishi Sunak’s decision to cut the main rates of Fuel Duty by 5p to 52.95p a litre. With pump prices at record highs – and rising – motorists needed something more than the rate freeze that has persisted for over a decade now. In this respect, the Chancellor has delivered.

“However, as welcome as this duty cut is, it is likely to offer only limited relief to squeezed budgets. The average cost of a litre of petrol has risen by more than 5p over the past week – if that trend continues, the Chancellor’s discount could effectively be wiped out within days.

Of course, what it most helpful for the future is strong, consistent, long-term incentives for electric motoring, so that more people can afford to switch to EVs and avoid high prices at the pump.”

On other reviews

“Today, the Chancellor published a Tax Plan for the rest of this Parliament. However, it’s a slight document that doesn’t address one of our concerns from after last year’s Autumn Budget: so many other tax reviews and consultations – into VED for cars, into VED for vans, into a ZEV mandate, and more – have not yet led to any confirmed legislative action, even though some were originally announced years ago.

“If some of these ideas have been dropped, then the Chancellor should tell us so. If not, then he should confirm the details as soon as possible. The fleet industry needs as much information as possible in order to fully prepare for the future.”

On Company Car Tax rates

“Previously, Rishi Sunak had a good record on warning businesses and motorists of upcoming Company Car Tax rates. However, that record is starting to tarnish. The rates for 2025-26 and beyond still haven’t been confirmed – meaning that fleets entering into three- or four-year contracts today are unable to plan properly for the future.”

 

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