A CUT in the rate of VAT would re-energise British industry and provide consumers with a much-needed “feel-good factor”, a senior Scottish businessman said today.
Brian Gilda, founder and chairman of the Peoples Ford dealership chain, called on the UK government to consider the move as he revealed that his company had managed to defy the economic gloom by booking a rise in both profits and turnover.
Pressure is mounting on Chancellor George Osborne to use this month’s Budget to take his foot off the austerity pedal and ease the financial burden on consumers and businesses.
A temporary cut in VAT was used by the last Labour government at Westminster as part of a fiscal stimulus package designed to reinvigorate the economy. The measure was criticised for having little real impact.
Gilda, a high-profile supporter of the Labour Party, claimed a reduction in VAT would boost business and employment across all sectors.
“What is clear is that consumers rely on the feel-good factor and it is quite apparent that they are taking a long, hard look at discretionary spending until their own jobs and incomes can be safeguarded,” he said.
“Peoples will, of course, continue to review all revenue streams and cost items to ensure the company is as fit as it can be to best tackle the marketplace,” added Gilda.
Newly-filed accounts for the firm, which has seven Ford dealerships in Scotland and the north-west of England, show that pre-tax profits jumped 26 per cent to just over £2 million, on turnover up 1.6 per cent at £146.7m.
The results, covering the year to the end of July 2012, largely reflect an improvement in sales of new cars, strong cost control and reduced stocking levels, the group noted.
Gilda said turnover was the second highest since he founded the company nearly 30 years ago.
He also provided an upbeat outlook, in spite of the economic headwinds, forecasting a buoyant March when the new 13 plate hit the roads. Ford as a brand is benefiting from strong sales of the new Focus model, which features the UK-developed Ecoboost engine, and a redesigned Fiesta hatchback.
“The range and quality of Ford vehicles is the best it has been for many years,” Gilda said.
The firm has increased its presence in the north-west of England through the acquisition of the long-established Greyhound Ford dealership in Accrington, Lancashire. It has now been re-named Peoples of Accrington.
The group, which employs some 430 staff, has its Scottish showrooms in Edinburgh, Falkirk and Livingston.
Gilda said: “The group has consistently sought to recruit and retain the best employees in the marketplace and this has undoubtedly contributed to the company’s success and is a course of action which will remain at the forefront of my thinking.”