It is with relief that the UK’s 38 million motorists reacted to Chancellor George Osborne’s March 16 Budget Speech: for the 6th year in a row fuel duty on petrol and diesel will not be increased, despite many experts having predicted otherwise. Even a small rise to fuel duty above the rate of inflation could mean billions in added income for the Treasury; therefore drivers have met the freeze with enthusiasm.
In doing so, Mr Osborne has promised to save the average driver £75 a year and small business drivers with a van £275, thereby “…keep(ing) Britain on the move.’’ In his speech Mr Osborne said that, “…fuel costs still make up a significant part of household budgets…’’ and that families “…shouldn’t be penalised when oil prices fall.’’ Although international oil prices have fallen in recent times, it is not a given that this situation will prevail indefinitely, but this has certainly contributed to the decision. RAC chief engineer David Bizley has, although he praised the decision not to increase the duty, expressed disappointment that Mr Osborne has not committed to longer-term goals that could have frozen the duty beyond next year’s budget. As things are, £27 billion will be collected over the next year in fuel duty alone.
What has been disappointing, however, was the decision to raise the Insurance Premium Tax (IPT) for the second time in a row, even though it had been expected. The raise is relatively small at 0.5 per cent, and the additional £700 million being raised this way will be spent exclusively on flood defences. The decision has been met with great disappointment by the British Insurance Brokers’ Association (BIBA) who says that a year-on-year tax increase since March of last year represents an increase of 66.6 percent. According to a survey conducted by the AA, 87 per cent of drivers view this increase in a negative light and feel that some may be tempted to cancel their insurance. It is further likely that car insurances and breakdown cover will be increased too.
Backing for Driverless Cars
Chairman of Nissan Europe, Paul Willcox, is equally excited about the freeze in fuel duty, as he believes that the announcement will only contribute towards bringing autonomous driving technology to the market. The goal, ultimately, is to have zero emission vehicles and no fatalities on the road. Mr Willcox believes the freeze will help pave the way for these new technologies.
Since the price of fuel price increases of the past 10-15 years, less efficient vehicles or those with large engines have often felt a greater depreciation than more efficient motors. If you would like to find someone to ‘buy my car’ then the sooner you’re able to arrange a sale, the less depreciation you are likely to face.
The public has, as could be expected, reacted very positively to Mr Osborne’s announcements, despite some areas of concern, such as raising the IPT.