asset, consumer and motor finance industry in 2007 brings a respite
to this budget season’s dour reflections and forecasts for the
national economy.
According to FLA figures for 2007, FLA members wrote up to £93bn
in new business, £28bn of which was contributed to the UK business
sector and public services; representing about 30 per cent of all
fixed capital investment in the UK in 2007. The remaining £65bn of
the FLA’s new business volume was pumped into the UK’s consumer
sector, which represented 30 per cent of unsecured lending in the
UK for 2007. Furthermore, according to a statement by FLA Chairman
David Betteley, FLA members’ profits contributed £10.5bn to UK GDP,
supported 155,000 jobs and paid £2.5bn in taxes.
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The FLA’s business finance sector, which includes new and used
cars, commercial equipment, and big ticket leasing, recorded £26bn
in new business for the 12 months to December 31 2007. This
represented a 5.6 per cent increase from £24.5bn in December 2006.
In terms of assets, commercial equipment was the only sector that
saw growth in new business for 2007; it jumped 11 per cent from
£13bn at year-end 2006 to £14.7bn at year-end 2007. However, new
business volumes for big ticket leasing decreased 2 per cent over
the 12 months to December 31 2007, and car leasing decreased by 1
per cent over the same period.
In terms of finance type, operating leasing saw the most
significant growth of 16 per cent for the 12 months to December
2007, while finance leasing decreased 27 per cent over the same
period; partly due to changes to IFRS standards and the increasing
demand for asset financing from the pubic sector.
Meanwhile in light of the 2008 budget announcement on a new
capital allowance regime for business cars, Stephen Sklaroff,
Director General of the Finance & Leasing Association (FLA),
said:
“The Treasury’s decision to reform business travel taxation is
consistent with wider fiscal policy to encourage greener motoring.
We are glad that the bands will be few and broad, and that some of
discrimination against leased cars will be removed. We look forward
to talking to the Treasury about removing the rest of the
discrimination before legislation in 2009.”
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