Sue Robinson, director of the Retail Motor Industry Federation comments on today's PBR:

 

VAT
"The rise in VAT to 17.5% on 1 January 2010 will have an impact on consumer spending power and this in turn will impact new car registrations and the used car market.

"We would urge Government to delay this rise until the economy shows some positive signs of recovery and then commence a phased introduction of the increased rate.

Scrappage
"The RMI is disappointed that there has been no extension announced to the car scrappage scheme.

"The current scheme is self-financing and has stimulated the new car market.

"By 29 November, the Department for Business Innovation and Skills (BIS) had received notification of 282,898 orders for new vehicles under the scrappage scheme.

"The industry would have welcomed a further extension to off-set some of the negative market forces that could occur in 2010, particularly with the rise in VAT rate.

Small business corporation tax
"While we welcome the freezing of the small business corporation tax rate, any future increase in corporation tax for small businesses - of which a number are in the motor industry - will be damaging to the UK economy.

"Small businesses are the driving force of the UK and need support during this critical period of recovery. Instead of penalising businesses by increasing corporation tax the Government should be reducing the rate to encourage entrepreneurship and investment.

Business rates
"Although we welcome the extension of the empty property rate relief for 2010/11 the scope of the relief is derisory at £18,000 and will provide help for very few businesses.

Electric cars

"We welcome the Government's decision for electric cars to be exempt from company car tax for five years.

"However we are conscious of the fact that demand needs to be stimulated as this is a very small sector of the new car market.

"Further, we welcome the extension of a 60% vehicle allowance for electric vans; however this is still a relatively small percentage of the total market place.

First registration tax for new cars
"The motor industry has serious concerns regarding the impact on consumers that an introduction of first year registration fee for new vehicles would cause that was announced in the budget, April 2009.

"This introduction will lead to increased costs to the public of buying a vehicle and will directly stifle demand during a time of recovery for the automotive sector.

"We would strongly urge the Government to review the introduction of this tax."