4:55 pm, November 24, 2008
BUSINESS and consumers should benefit from some of the measures announced today by the Chancellor in his pre budget report, says the RMIF.
However, his apparent generosity in some areas is offset by increases in others, making it less attractive than it may appear, added a spokesman for the Retail Motor Industry Federation.
Here’s what RMIF director Sue Robinson had to say on the different points:
VAT reduced
‘The reduction in VAT means that car prices will fall, and could encourage consumers to return to showrooms. The VAT drop will also have an impact on the prices of thousands of other consumer goods and services, leaving cash-strapped households with more money to spend. This will help to restore consumer confidence, which is key to the revival of the overall economy.’
VED increase delayed
‘Delaying the introduction of changes to VED, and reducing the planned increases should reduce the burden on the motorist, and give the car market more time to adjust to the planned changes.’
Corporation tax increase postponed
‘Delaying the introduction of Corporation Tax increases planned for 2009 will be welcomed by business, but the Chancellor should have taken this move to its logical conclusion and scrapped the increase entirely. This would have been more beneficial to business in the long term.’
Changes to business rates on empty buildings scrapped
‘Scrapping business rates under £15,000 on empty business properties is a step in the right direction, and it shows that the Chancellor has listened to business, including the RMIF who lobbied on this subject. However we would like to see this extended more widely.’
National Insurance contributions to increase
‘National Insurance increases will have a negative impact on both employees and employers, both of whom will be paying more. This means less money for individuals to spend, but perhaps more seriously, could also be a disincentive for potential employers who wish to take on more staff.’
Following the pre budget report, the RMIF will be writing to the Chancellor to make its official Budget Submission.
Also, later this week the RMIF are meeting Lord Mandelson, Secretary of State for Business, Enterprise and Regulatory Reform, together with the Society of Motor Manufacturers and Traders (SMMT).
More on that can be found on the Car Dealer website later this week.
