The emergency budget announcement has sparked
a wave of reactions from the motor finance industry.

The Society of Motor Manufacturers and Traders
(SMMT), for example, stated that it “welcomed [the] budget for the
long-term clarity and stability it gives to UK manufacturing
through clear measures to re-balance the economy and place greater
importance on the private sector and industries”.

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Paul Everitt, SMMT chief executive, said:
“[The] emergency Budget sets out painful measures for individuals
and businesses.

“Although there are concerns about the rise in
VAT, its delayed introduction will give industry an opportunity to
prepare and may boost demand in the short-term.

“The determination to increase bank lending
and investment in new low carbon technologies is welcome, but
effective measures are urgently required to help sustain a still
fragile recovery.”

And John Lewis, chief executive of the British
Vehicle Rental and Leasing Association (BVRLA), added that he
believed George Osborne had “delivered a budget that will
start to reduce the deficit with the urgency required without
stifling the overall economy.”

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He added, however, that the BVRLA was
disappointed with the staged increases in fuel duty proposed for
this year and next year and expressed concerns that the banking
levy could mean companies are forced to pay higher rates to
lenders.

Lewis said: “Many companies are already paying
extortionately high rates to their lenders and we hope that this
banking levy does not indirectly encourage banks to increase these
costs even further.”

Nevertheless, increased VAT and decreased
capital allowances could be good news for leasing as companies look
to avoid unnecessary burdens on their balance sheets, he said.