Following over two years of uncertainty and business challenges, the UK economy is still clearly feeling the effects of Brexit and the pandemic. Now, due to the ongoing conflict in Ukraine, the global supply chain disruption leading to continued shortages and the full scale cost of living crunch well under way, there was a clear sense of nervousness when tuning in to today’s budget.
With fuel prices already rising at the fastest pace in three decades, the Ukraine conflict is now exacerbating these existing pressures, pushing up global oil and gas prices further. With fuel costs at a record high, we welcome the announcement of a cut to fuel duty by 5p a litre from 6pm this evening – only the second time this has happened in the last 20 years. Whilst this may offer some relief to individuals and businesses operating their fleets, it is estimated to only be around £3.30 per tank.
This clearly shows that the government recognises the need to support individuals and businesses dealing with the rising costs of living, however we acknowledge that this is just one challenge that the industry is currently facing, alongside a great shortage of vehicles and parts that are making manufacture increasingly difficult.
It is clear that the government continues to sign-post us towards a green future with the announcement of relief on energy saving measures, with 0% VAT on all energy saving materials, however it was disappointing to not hear of any further support offered to the electric vehicle industry.
As we move ever-closer to the 2030 ban on petrol and diesel vehicles, there is still more that needs to be done to support EV manufacturers to ensure they are more affordable for businesses. Once again, I must reiterate that enhanced financial support is still needed from the government to increase affordability of the vehicles and ensure there is suitable infrastructure in place for businesses that decide to make this important transition.
Overall, while today’s budget highlighted that there will be a tough period ahead, we hope that the fuel duty cut will act as a small relief for the fleet industry against the backdrop of the supply shortages and ongoing challenges associated with this.
All comments attributable to David Brennan, CEO at Nexus Vehicle Rental.