SMMT warns the Chancellor not to endanger small car companies

The Society of Motor Manufacturers and Traders (SMMT) has issued a stark warning to Chancellor Gordon Brown ahead of next week’s Budget, saying that cost pressures in this country are threatening the future of small car companies.

SMMT chief executive Christopher Macgowan is calling on the Government to “level the playing field” by making it easier for smaller companies to apply for research and development tax credits. He also warned against “knee-jerk” moves to make big changes to car road tax and once again called for an immediate end to the tax penalty for drivers who choose CO2-friendly diesel vehicles.

Macgowan says component suppliers are most at risk, pointing to the threat from emerging markets, and adds: “Regulatory costs in areas like environment and employment, as well as competition for investment and skills, make these companies particularly vulnerable to a move east – or going under altogether. The Chancellor must consider this carefully in his next Budget.”

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