2012 Budget preview
We've talked to the experts to find out what the 2012 Budget has in store for drivers
So far 2012 has seen fuel and insurance costs rise to record-breaking levels, pushing motorists to the very limit. It’s led to public outrage, with the FairFuelUK campaign – with the support of organisations like the AA – calling on the Government to cut duty and deliver some respite to motorists’ wallets.
Chancellor George Osborne is due to deliver his 2012 Budget on 21 March, and drivers across the country will be looking to him for support. Last year he cut fuel duty by a penny, and delayed an additional increase in fuel tax until this summer.
But will Mr Osborne live up to his party’s pre-election promise to be a “friend of the motorist” or will he be more interested in generating revenue? We've talked to the experts to find out what they think the 2012 Budget has in store for drivers.
The bad news is, we’re unlikely to see another cut in fuel duty. A spokesman for the Society of Motor Manufacturers and Traders (SMMT) said: “We’ve seen the Chancellor saying he won’t be cutting duty. It remains to be seen whether there will be any increases, though.”
The AA agrees. A spokesman told us: “The signals are that they won’t do anything about fuel duty and that the August increase will go ahead.”
This means we’ll see three pence per litre (ppl) added to pump prices in the summer. And there may be additional increases.
The AA spokesman said: “We’re not anticipating there to be any duty increase in March, and it’s unlikely George Osborne will add a further increase to the one due in August. If there is an increase, it’s likely to be scheduled for the autumn or January 2013.”
Both the SMMT and the AA anticipate the Chancellor will set out company car tax rates for the next few years. The AA spokesman told us: “There’s likely to be some small changes to the company car tax bands, favouring low CO2 vehicles and bringing the threshold for more stringent rates brought down slightly.”
And it’s also likely there will be some increases to vehicle excise duty (VED). The SMMT spokesman said: “We think there are plans for VED to increase. What we’re saying to the Chancellor is to not increase it by more than the rate of inflation. We don’t want any surprises.”
The AA spokesman said: “If the Chancellor feels he can’t increase fuel duty, VED is likely to be the area where he’ll decide he can find some extra cash. We think the Government will increase VED by the rate of inflation – around four per cent.”
We’ll be reporting on the Budget as the Chancellor delivers his speech to Parliament on Wednesday.
In the meantime, we’d like to know your thoughts. Which measures do you think George Osborne should take? Is an increase in fuel duty inevitable, given the state of the economy? Or are there other ways the Government could raise money that wouldn’t unfairly penalise drivers? Let us know your thoughts in the comments below...
