The fleet industry and policy analysts comment on George Osborne's emergency budget.

The fleet industry and policy analysts comment on George Osborne's emergency budget.

James Stamp, head of transport at KPMG UK comments on the Chancellor’s commitment to invest in UK roads. He said:

“In the last budget, the Government announced a major road investment program worth £15billion. Today, the Chancellor announced that road tax (VED) income will be "ring fenced". This provides some clarity about where funding for the ambitious road projects will be found.

“However, we note that while road tax raises around £6 billion per year, this is dwarfed by income collected from fuel duty which is around £27 billion. We believe that more of this income should be reinvested in roads and transport infrastructure in line with the Chancellor’s statement that money raised from drivers should be spent on the roads they drive on.”

RHA chief executive Richard Burnett said the freeze on fuel duty was positive, but that the Government could have done more: "The freeze on fuel duty continues the very positive policy of the last government and will give a massive boost to business confidence not only in the road haulage industry but the economy as a whole.

"We would have preferred a 3p a litre cut in duty, to boost both jobs and growth but it was essential that duty was not increased. Our hauliers already pay by far the highest diesel duty in the EU and twice as much as many of our competitors."

James Hookham, FTA’s deputy chief executive, agreed: “The Chancellor has listened to the voice of industry by keeping fuel duty at current levels, which is to be welcomed.  However, the Government has emphasised that its primary objective is to protect the UK economy.  We believe that reducing fuel duty would make a huge contribution to this objective and we will continue to campaign with FairFuelUK for a 3 pence per litre cut in order to stimulate economic growth.”

RAC Business spokesperson Jenny Powley said the new VED bands could impact the take up of low emission, non electric vehicles.

 “The changes to VED bands will have an impact on the total cost of ownership, which will have to be picked up by the company when fleet managers are purchasing new cars from 2017.

“Fleet managers have been proactive in encouraging drivers to think about cleaner cars by going for vehicles with low C02 emissions which have zero or very low rates of road tax.

“But there is now a big question mark over how the new changes will affect company car drivers’ inclination to go for low carbon dioxide emitting, fuel efficient vehicles.

“For the first year of ownership of a new vehicle, incentives will still exist to select low emitting vehicles but thereafter, a flat rate will apply to most vehicles. This may raise questions about how companies will make purchasing decisions when it comes to new vehicles in the future.

“We hope the new regime doesn’t undermine the major progress that we are making in reducing carbon dioxide emissions.”

Kyle Truman, marketing director at Epyx, added: “Potentially the most interesting development in the Budget from a fleet point of view is the proposed extension of the first MoT from three to four years. Effectively, this would mean that the majority of cars owned by fleets would never need to be MOT’d because they are on shorter cycles than four years, which is a definite gain in terms of both costs and reduced hassle surrounding defleeting.”

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