BUDGET: Expert comment - Edmund King, The AA

The AA President Edmund King comments on today's Budget.

"Staging the fuel duty increase will avoid a big hit in an April Fuel's Day Fiasco, however a 1p increase will hit still hit motorists hard with record prices at the pumps. Perhaps the thought of 32 million fuming drivers and voters influenced Government thinking.” The AA will examine closely any phased introduction of further fuel duty increases of 1p in October and the remainder in January. Each 1p increase is 50p a tank and £2.12 a month for a family with two cars, an increase that his higher than the average increase in council tax for 2010-11(£1.56). If pump prices continue to increase the Treasury should rethink their proposals.

 

“Drivers' relief at the Chancellor not raising fuel duty by 3p on April Fool’s Day will be short-lived if prices continue to rise. The immediate rise of 1p per litre will cost 50p a tank more to fill up. Had the inflation + 1p increase gone ahead, it would have added £1.50 to the typical cost of refilling a petrol or diesel car, or £37.50 a year. For a family with two petrol cars, that alone would have been four times the average increase in council tax for this coming year 1,” says Professor Edmund King, the AA president.

 

“In the last Pre-Budget Report, the Treasury admitted that high fuel prices make drivers cut back and reduce tax receipts 2. It therefore makes sense not to increase the burden on families and businesses struggling to recover from recession - inflicting more pain for no gain, and undermining economic recovery.”

 

Roads

"The AA welcomed the extra £100m for local roads and potholes. This was the amount spent on filling potholes last year. The AA had campaigned for extra funding to fill the potholes and are delighted that the current pothole plague can be addressed.”

 

VED and showroom tax

 

"The positive Government scrappage scheme helped some motor manufacturers get back on their feet, but the £515 "showroom" tax on certain new cars could bring some to their knees. At the other end of the scale the AA welcomes the zero first year rate for cars emitting less than 165 g/km CO2."

 

 

"The first year rate for cars in band M (over 255 CO2) will be £950 of which £515 is "showroom tax" and £435 is VED. An example of an M band car is the Lexus LX 460 A8.

 

Even cars in the L band (226-255 CO2) will be hit with a £750 first year rate of which £325 is "showroom tax" and £425 is VED. Typical L band car is a Vauxhall Zafira 2.0i 16V Turbo 200PS M6."