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Chancellor Alistair Darling's assessment of the UK's economic prospects in Saturday's Guardian was so bleak that many are interpreting it as a roundabout way of saying "I resign".
Whatever Darling meant (and he clearly meant to say it), fleets have more than a passing interest in whether or not the country is, as he suggested, facing the worst economic times for 60 years.
For one thing, petrol was still rationed in 1948. Britain was slowly rebuilding its worn-out industrial base after the Depression and World War II. The country was so desperately short of credit and foreign exchange that expensive imports such as oil had to take a back seat.
Sixty years later, the economy is more advanced and prosperous but perhaps some uncomfortable parallels with the late '40s occurred to Darling as he stared reflectively into the flickering flames of a peat fire at his Hebridean holiday retreat last week.
For one thing, the UK's days as an earner of foreign exchange from energy exports are over. As of this year, imported oil and gas will have to rapidly take the place of dwindling North Sea production, adding ever-larger debits to Britain's balance of payments. At the same time, an enduring financial hangover from the biggest credit bubble in history will continue to stretch the country's finances as tight as the top of an oil drum.
On Tuesday, amid calls for the Chancellor to be sacked - presumably for being 'uneconomical' with the truth - the CBI added weight to the suggestion the UK has reached a turning point, calling for a national drive to redesign the economy and to strengthen and rebuild the UK's manufacturing base.
What does all this mean for car fleets? Fundamentally, they need finance and fuel and no-one - least of all Darling - is offering the prospect that either of those commodities will return to being cheap or plentiful again any time soon.
Of course, the fleet industry has successfully navigated downturns before, in circumstances where it was much less well-equipped to manage change. Imagine being a fleet manager in the mid-1970s, redesigning a fleet to cope with the impacts of the oil embargo, armed only with a slide rule, a book of list prices and sheet of squared paper.
Today the need for change is no less urgent or pressing than it was 30 (or perhaps 60) years ago. Next year, the new 160g/km threshold for writing-down allowances will dramatically affect many vehicles' cost profiles. This will hit in April, when the downturn is expected by many analysts to still be biting.
Thankfully, the tools available to fleets today are more numerous and robust than in the past. Multi-funded car schemes and other innovative solutions offered by forward-thinking suppliers can provide much-needed flexibility to companies faced with the need to adapt their employee mobility strategies in the light of rising costs and slowing revenue growth.
Whole Life Cost software, especially, is a powerful aid to sorting out low-cost winners from high-cost threats when setting choice lists. Whole Life Costs are closely related to CO2 emissions, of course, so using them to set policy (if you don't already do so) is probably the most important move you can make to prepare for whatever Darling - or his successor - together with the global economy is likely to throw at your fleet.
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Business Car Magazine © 2020 | Business Car is part of NS Media Group.
