The motor finance and fleet industries have
had a broadly positive reaction to the 2011 budget announcement,
although many are sceptical about the long-term benefits their
customers will derive from the so-called ‘motorist’s budget’.
Most optimistic was British Vehicle Rental and
Leasing Association chief executive John Lewis, who remarked: “At
last we have a Budget with some good news for motorists. As
expected, the Chancellor has abandoned April’s 1p increase in fuel
duty, but surprised everyone by delaying the inflation increase
until next year and in fact reducing duty by 1p. His fair fuel
stabiliser is ingenious, shifting the burden of taxation upstream
when crude oil prices increase.”
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Speaking for the point of sale finance
business, Black Horse managing director Chris Sutton also welcomed
moves towards a lower cost of motoring, but warned against the
expectation of a major boost to the dealer market.
“Any moves by the Government to ease the costs
of motoring has to be good news, both for businesses and consumers
– particularly when the Government predicts economic recovery will
be slower than initially forecast and inflation is climbing. But I
think it’s unlikely this Budget will have a major effect on
dealers’ businesses or the availability of finance in the short to
medium term.”
Taking the fleet perspective, Alphabet
director Mark Sinclair was uncertain that the fuel situation was
likely to improve dramatically for business fleet operators.
“When it comes to fuel’s impact on running
costs, this Budget is rather like losing a pound and finding 10p.
The stabiliser will not cut duty at times of high oil prices. It
will just limit increases to the rate of inflation, which is
currently running at over twice the Government’s target. Businesses
are being given a brief respite from fuel cost pressures, not a
lasting reprieve.”
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