91ÖÆƬ³§¹ÙÍø

SMMTexpects consistent growth across the automotive sector by 2012 but to ensure and sustain this, positive government action is essential.

Ìý

“The manufacturing sector is leading economic recovery and government must use this Budget to sustain and enhance this position,” said SMMTChief Executive, Paul Everitt. “This Budget comes at a critical time for UK automotive and we’re urging government to deliver the right mix of supportive policies to secure sustainable growth and strengthen the role of the UK as leading developer, producer and exporter of automotive products. Better targeted and strategic use of existing policies, funding instruments and business taxation will help automotive manufacturers and suppliers in the UK realise their potential and position the UK at the forefront of future technology development.”

Ìý

Ìý

To promote business growth, government should:

·ÌýÌýÌýÌýÌýÌýÌýÌý Continue to put pressure on banks and the finance community to improve access to working capital, investment finance and credit guarantees.

·ÌýÌýÌýÌýÌýÌýÌýÌý Restructure the R&D tax credits regime to make it work better for high value manufacturing and incentivise increased R&D spending by the automotive industry in the UK.

·ÌýÌýÌýÌýÌýÌýÌýÌý Enhance the Capital Allowances system to acknowledge the capital intensity, global footing and cyclical risks of the automotive sector.

·ÌýÌýÌýÌýÌýÌýÌýÌý Review Business Rates to ease regulatory costs on the manufacturing sector and make UK operations internationally competitive.

·ÌýÌýÌýÌýÌýÌýÌýÌý Provide greater clarity on how environmental taxes and commitments are applied to businesses to retain competitiveness.

·ÌýÌýÌýÌýÌýÌýÌýÌý Realise the growth opportunities from international trade, exports and inward investment by adopting a consistent trade policy that supports manufacturing.

·ÌýÌýÌýÌýÌýÌýÌýÌý Attract international investment and help UK-based businesses to compete on a global playing field by making sure tax regulations are globally competitive.

·ÌýÌýÌýÌýÌýÌýÌýÌý Build on UK engineering and academic excellence by working to integrate university and industry research and development.

·ÌýÌýÌýÌýÌýÌýÌýÌý Support the work of the Automotive Council by improving coordination of public and private activities and supporting its recommendation for the sector in policies and programmes.

Ìý

With a significant squeeze on business and household spending, SMMTrecommended that government should:

·ÌýÌýÌýÌýÌýÌýÌýÌý Relieve the immediate financial pressure on businesses, fleet operators, hauliers and motorists by freezing fuel duty.

·ÌýÌýÌýÌýÌýÌýÌýÌý Deliver stability and certainty to motorists by not raising duties on vehicles beyond levels set in the 2010 Budget.

·ÌýÌýÌýÌýÌýÌýÌýÌý Remove the first year VED rate.

·ÌýÌýÌýÌýÌýÌýÌýÌý Urgently implement a scheme to incentivise the purchase of low carbon commercial vehicles.

·ÌýÌýÌýÌýÌýÌýÌýÌý Set out a durable and consistent set of measures or incentives to support the uptake of alternative fuels.

·ÌýÌýÌýÌýÌýÌýÌýÌý Put in place long-term commitments to support low carbon infrastructure development to enhance consumer and business confidence in low carbon technologies.

·ÌýÌýÌýÌýÌýÌýÌýÌý Consider a means of assessing VED for commercial vehicles based on age and environmental status to incentivise the adoption of the most efficient vehicles.

·ÌýÌýÌýÌýÌýÌýÌýÌý Remove the unjustified three percentage point penalty on diesel company cars.

Ìý

Industry and government collaboration through the Automotive Council is setting the strategic agenda for competitiveness and growth in the automotive sector in the UK. SMMTsuggests that the 2011 Budget should take up this strategic agenda and promote investment in capital equipment, R&D, low carbon technologies and skills. These measures, coupled with schemes to enhance the availability of finance and credit are crucial to reinforce the commitment of existing UK-based operations, while broadening the appeal of the UK and the automotive industry to new suppliers and investors.

Ìý

UK automotive represents around 3% of total GDP, accounts for two thirds of total manufacturing turnover and is the country’s largest sector in terms of export, generating around £24 billion in revenue. Typically achieving a turnover of around £50bn, employing over 700,000 people and producing an annual net value-added to the economy in excess of £10bn, the significance of the sector cannot be underestimated. In 2010 the industry spent £1.5bn on R&D in the UK.