Chancellor Rishi Sunak has made some big announcements for fleets in his March 2020 Budget. Matthew Walters, Head of Consultancy LeasePlan UK, provides his initial thoughts.
On the economic forecasts
“In the run-up to this Budget, the headlines have been dominated by coronavirus, and they will continue to be dominated by coronavirus in the weeks and months to come. This, along with the uncertainty caused by the ongoing Brexit negotiations, is the context through which today’s economic forecasts must be considered. It’s possible that today’s rather anaemic growth numbers will have to be downgraded again in future.
“However, the fleet industry is well-placed to overcome these economic challenges, just as we have overcome similar challenges in the past. Not only did we as an industry account for over half of all new car sales in 2019, but we are also leading the adoption of cleaner motoring technologies.”
On infrastructure spending
“Rishi Sunak has followed Theresa May’s Chancellor, Philip Hammond, by spending £billions on improving road networks. With the UK’s road infrastructure ranked just 36th in the world, well behind comparable economies, it’s clear that improvement is needed. This extra spending will help businesses and individuals who are fed up with the damage and delays caused by substandard highways.”
On vehicle taxes
“At last, after much prevarication from the last government, along with a delay caused by the general election, we finally have confirmation of the rates of Company Car Tax for the next few years. In truth, these rates are not surprising – they were announced last July but weren’t signed into law – yet they are still historic and welcome. For the first time, the cleanest vehicles will pay no CCT at all, and we now know that the rates will be frozen at their 2022-23 levels until 2024-25. This is the clarity we have demanded for years.
“The system of Vehicle Excise Duty has also been changed to encourage cleaner motoring: zero-emission vehicles will be exempted from the ‘expensive car’ supplement.
“It’s less good news that, in a few short weeks’ time, VED will be uprated in line with inflation – but, given that the Chancellor has also frozen Fuel Duty for another year, we cannot complain too loudly. This Budget was kinder than fleet professionals might have expected.”
On other green measures
“LeasePlan welcomes the Budget’s commitment to green motoring in general. The Chancellor has decided to keep the Plug-In Car Grant going until 2022-23, despite speculation that it could end this April, and he has committed to funding the electric charging infrastructure so that ‘drivers are never more than 30 miles from a rapid charging station’.
“This second policy is particularly important. We know that fleets and motorists are keener and keener to go electric, but many remain worried about the availability of chargers. Allaying these fears is crucial for the country to progress along the Road to Zero.”
Find out more
Listen to to the latest Spring Budget 2020 reaction and analysis from LeasePlan’s Matthew Walters and Specialist Fleet Consultant in our upcoming Fleet Navigator podcast.