Following much speculation, the Chancellor confirmed that the Government was putting £300m behind a car scrappage scheme. Consumers will receive up £2,000 for the purchase of a new car, if they trade in a vehicle at least 10 years old.
But once again alcohol and tobacco have been targets with tax hikes. These include raising duty on alcohol and tobacco up by 2%, the equivalent of 1p per pint of beer, and 7p per pack of 20 cigarettes. Fuel duty is also set to rise by 2p per litre from September this year.
Marketing asked industry figures to find out what they made of the Budget.
Car scrappage scheme
Paul Everitt, chief executive of the Society for Motor Manufacturers and Traders (SMMT): ‘This is good news for consumers and will get people back into showrooms, kick-starting demand in the market. The scheme recognises the economic value of the motor industry and we are determined to make it a success. There is clearly a great deal to do and we look forward to discussing the finer detail of the proposal with government in the coming days.'
Marc Raven, director of communications, Citroen UK: ‘We absolutely support the introduction of the scrappage scheme, and it is about what we expected. Anything which gets consumers into showrooms is a good idea. Obviously we would have preferred it if the Government had offered more than £2,000, and we'll be offering the scrappage discount immediately, rather than from mid-May.'
Alcohol duty rise:
Michael Turner, chairman of the British Beer and Pub Association and pub operator Fuller, Smith & Turner: ‘Today's Budget signs the death warrant for thousands of Britain's pubs and for tens of thousands of British jobs. At a time when the rest of the economy is getting a supporting hand, the beer and pub industry is being singled out for punitive action. Today's rise is a further body blow. The result will be more pubs closing, more jobs being lost and more people consuming alcohol outside supervised, licensed premises.'
Benet Slay, managing director, Diageo GB: ‘We are disappointed with the Chancellor's decision to keep the 2% tax escalator across spirits, beer and wine. In February, the alcohol industry made a joint submission to the Government calling for the duty escalator to be abandoned in the current economic climate. It is now clear that Government has ignored our concerns and decided to further penalise many local pubs and bars as well as all adults who enjoy a pint, a gin and tonic, or a glass of wine.'
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