But he says these incentives to boost customer spending must be matched by banks starting to lend cash again.
‘The chancellor has made a positive first step to help restore consumer confidence and kick-start responsible spending,’ said Everitt.
‘We now need to see action to remove the constraints on credit and finance so consumers and businesses can take advantage of the changes announced today.’
The SMMT also responded to key motor industry changes in the budget:
• 15 per cent VAT: Combined with the recent cuts in interest rates, (it) will encourage consumer spending, impacting on both the new and used vehicle markets.
• Road tax rise delay: The scrapping of penal increases to VED is welcome. We are disappointed the chancellor hasn’t taken the opportunity to reverse his plans for a first rate of VED.
The SMMT has reiterated its call for Government financial aid. On Thursday, industry executives will meet with business secretary Lord Mandleson. Demands include:
• Allowing manufacturers’ finance companies access to the funding available to banks through the special liquidity arrangements. This would allow them to support customers and their franchise networks.
• Scrapping plans for increased VED and new first year rate. This would provide a strong signal to buyers and help to improve residual values.
• Increased capital allowances for fleet buyers, particularly for buyers of commercial vehicles, to stimulate immediate demand.
• Shelve plans for reform of business car capital allowances, as overall impact and timing is unhelpful.
• Remove expensive car restrictions under capital allowances to help demand for UK higher end manufacturers.