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PBR LATEST: Industry Pre-Budget comment

Date: 10 October 2007

BusinessCar brings you comment from some of the fleet industry's leading executives. Add your comment here on the 2007 Pre-Budget Report.

John Lewis, director general, BVRLA: "This was about cross-party-politics and not about setting the right conditions for business. The reality is that business needs to be able to plan for the long term, while this statement deals with short term issues and seems more concerned with trying to confound opposition policies.

??"We are pleased that, at last, the Chancellor has seen fit to recognise Employee Car Ownership schemes for what they are - genuine ownership schemes. However, while he has removed the threat of treating them for benefit in kind, we are still enormously concerned that, two years on, we are still awaiting the outcome of the AMAP review. It is inconceivable why, after so long and despite the amount of evidence provided by the industry, the government is still keeping us in the dark. There is no further information that the Government could possibly want in order to come to a proper conclusion. The industry has been totally open and informative and now is the time for a decision that will allow industry to get on with its work - that is making money for UK plc. ??"The increase in benefit in kind for private fuel will make a further disincentive to run higher polluting vehicles and that will at least be of some help to the environment.

??"Failure to detail the long awaited changes to corporation tax allowances serves merely to underline our disappointment in the overall statement. Like AMAPs, the Government has all the information it could possibly want at its disposal. We completely fail to understand the reason for any further delay. This is potentially a major change to the way the industry operates and which deserves a more grown-up approach, one free from the all too often seen inter-party rivalries of this government. We need an end to the guessing game that is being forced on to us by this approach."

Nick Sutton, chairman, Provecta Car Plan: "Clearly the Government recognises that organisations need a number of ways to keep employees mobile, including ECO schemes and privately owned cars. By endorsing ECO as a cost effective business tool, the Government is allowing companies to choose the best business travel option for them to remain competitive.

"Whether employees are using company cars, ECO cars or their own car for work, the tax system must now take into account the environmental impact of every journey. When ministers look at the options open to them regarding changes to the AMAPs system, aligning them to CO2 emissions would actively encourage a large proportion of the population to opt for newer, cleaner and greener cars.

"We know that simply encouraging ordinary employees into newer, less polluting cars and encouraging environmentally accountable driving habits will be good for business and good for the environment."

David Brennan, managing director, LeasePlan: "Generally speaking this was a fairly neutral Pre-Budget speech which continues to underpin the Government's commitment to green policies. I am, however, pleased but not surprised that the Government has seen fit not to consider ECO schemes subject to benefit-in-kind.

"Through the King Report, the Government is also looking at ways to improve the awareness and availability of low carbon-cars which can only serve to drive down CO2 emissions further.

"In the responses to the consultation on modernising tax relief for business expenditure on cars, the Government was called upon to apply environmental policies to private cars as well. It's certainly something to look out for in the future, but as we stand, the company car remains the greenest on the road - the pre-budget report has once again cemented that position."

Edmund King, executive director, RAC Foundation: "Whilst any increase in transport spending is welcome, we need to see a greater proportion spent on roads. The vast majority of trips are by road and the motorist already pays more than twice as much in motoring taxes each year than the total transport budget. The motorist will view the recent fuel duty increase and proposals for yet more increases over the next two years as money for nothing unless the road infrastructure is improved."

Andy Leech, business leader, CFC Solutions: "The key point of the first part of the King Review is that it sets out what could easily be adopted by the Government as a single, clear objective on road transport CO2 - that per kilometre carbon emissions could be reduced by 50% by 2030. Fleets would obviously and properly be expected to play a part in this.

"For car fleets, there is little beyond this that could be described as informative. Other than noting corporate fleets are likely to be inclined towards a level of social responsibility, and that we are in a good position to adopt new technologies, the Review provides no guidance on which future technologies are likely to be suitable for fleets and how we may be encouraged to adopt them.

"For van fleets, the picture is slightly different. The PBR does note, as have many commentators, the current lack of a formal CO2 certification process for vans and this is something that could, and is perhaps likely, to be put in place relatively quickly. It also points out clear operational policies that could be adopted by van fleets - that better driving could be a key factor, for example. This could lead to further Government action soon, such as an extension to the SAFED initiative.

"Really, the first part of the Review tells us little that we didn't already know. What we are waiting for is part two and the Government's response to it."

Alec Murray, chairman, Retail Motor Industry Federation: "The Chancellor has missed an opportunity by failing to twin his Vehicle Excise Duty evasion clampdown, with a matching attack on car insurance dodging.

"There are 27 million drivers on Britain's roads, and it is estimated that one in 10 are currently uninsured.

"The insurance premiums paid by law-abiding motorists are kept high in order to pay for the 2.7 million who shirk their responsibilities as road users. VED and car insurance evasion go hand in hand, so the Chancellor had an opportunity to allow motorists to have more money in their pocket at the end of the year, and reduce the misery that results from crashes involving uninsured vehicles.

"In the Pre-Budget Report, Chancellor of the Exchequer Alistair Darling also revealed strategies intended to help businesses. He said that the main rate of corporation tax would be reduced from 30% to 28%. He also plans to simplify the tax system relating to self-employed staff.

"Through these plans, the Chancellor seems to be helping businesses by reducing costs and red tape. Let's hope he follows through."

Check back soon for more industry comments