Blog: The Budget
Dave Leggett | 22 April 2009
Was this year's Budget a bit of a damp squib? It is certainly true to say there weren't too many surprises. Alcohol, cigarette and fuel duties are all up. Par for the course. The scrappage incentive was an open secret for the last few weeks. Will it make much difference? Don't expect the UK car market to suddenly be up 40%. Try 10% over the course of a year.
As JD Power's Arthur Maher explained to me earlier, there are some important differences between Germany and Britain. For one thing, we have a currency on the slide and much of our car market is sourced from inside the eurozone.
And some dealers aren't exactly jumping for joy either, as they worry about the practicalities of how this scheme will work. As ever, the devil's in the detail (why aren't MOT - the UK's road worthiness test - fails eligible?).
In a sense, the elephant in the room that is still clambering about inconveniently and breaking the furniture is the mother of recessions that is on at the minute. The Budget is a kind of tinkering, a metaphorical playing with the remote control while the boisterous elephant tramples the television.
Keeping the structure of the room intact is the priority, even if we don't really want to hear about the hundreds of billions that have been sunk into propping up banks (a necessary evil, goddamit) and the government debt that it has created. That's debt, sooner or later, for you and me.
The IMF warned yesterday that credit crunch losses could reach $4 trillion and that the world's financial system remains in a mess. The bank bailout/toxic debt/hedge fund/CDS numbers became hard for mere mortals to get their heads around some time ago. But getting a solid recovery from this global recession will mean more for all of us than the actions individual governments can take, even if they can mitigate the recession's worst effects.
It's sounding increasingly like a long haul, starting next year when things have stopped getting worse.
The UK's scrappage scheme is - on balance - a welcome support measure, but it's far from the end of the story. And UK-based vehicle manufacturers won't be huge benificiaries - more needs to be done for them. A sinking pound doesn't help all that much when your main export markets are stuffed (and anything imported for manufacturing becomes more expensive, too).
I'm throwing this in randomly on the grounds that we could all do with a few laughs. Imagine getting a Porsche into an elevator. It could only happen in China. Where there's a will, there's very often a way.
The UK government's scrappage scheme may add just 100,000 units to the UK car market in 2009 according to an analyst at JD Power....
I'm starting to get a small idea of the scale of things here in China, but really, I'm only scratching the surface of this vast country....