A Budget to get the UK moving again
- Credit: Getty Images/iStockphoto
We have all worked out the Government’s plan to deal with coronavirus and whether we agree with it or not, we can and must plan around it.
The vaccination rate has been amazing and it seems likely the whole of the UK adult population will be completed by the end of the summer.
It also appears the effectiveness of the vaccine will ensure minimal pressure on our hospitals and although we must be guarded and accept new variants could produce new challenges, we appear to be getting on top.
By April 12 when many shops are allowed to open again we will have been in lockdown or severe restrictions for over five months, and the hospitality trade will have to wait a further five weeks to open with a reasonable chance of making money.
You can understand the Chancellor’s difficulty in balancing the books as in the tax year to April 2021 we will have been in some form of lockdown for over half the period and the Government’s income from taxation has been seriously diminished.
Add to this the injection of support monies for the NHS, furlough subsidies, grants, reductions in rates on retail premises, and reductions in VAT for the hospitality trade and you can see why the Chancellor has to increase income dramatically.
The motor industry is a major provider of income not only through VAT on around nine million private cars and leisure vehicles per annum, but on vehicle excise duty and fuel duty too.
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With massive reductions in purchases and usage this is a vital part of the economy to return to normal levels and there will be an additional benefit as the industry will bring back employees as demand increases.
Furthermore, with lower emission targets to achieve there will be more encouragement to move to alternate fuelled vehicles including hybrids and pure electric.
Also the Government is hoping to get a new improved alternative to petrol available from September. This is coded E10 which is a mixture of ethanol, using grains, sugars and waste wood.
New products are being introduced by manufacturers and they, too, are desperate for sales to return so expect a continuation of attractive offers to get the market moving again.
More and more are announcing the end of diesel production and some are planning to offer only an electric model line-up from 2025.
The UK has realised the need for massive investment in new electric battery technology and the first plan for a 'gigafactory' of 4.5 million square feet is on course to be built in Coventry.
The aim is to have the factory up and running by 2025 protecting tens of thousands of jobs.
Nissan, Vauxhall and Jaguar/ Land Rover are just three major world players who have stated it is a requirement if they are to retain factories in Britain.
Also remember if you want to change your vehicle in March it is possible through a click and collect system and the 21 plate is now with us.
Talk to your local dealer, even if you would prefer to postpone delivery until April 12 when showrooms can open again.
Stay safe and keep smiling. I look forward to next weeks column.