Motorists to get Budget break?
Even with the price of diesel, for example, hitting £1.50 a litre (with more inevitably rises to come). Buy to mark National Fair Fuel Day, we've made a Budget motoring wish-list. Will George Osborne listen? Er...
This will add a further 3p a litre. Recently the Centre for Economics and Business Research was asked by Fair Fuel to examine the impact of a cut in fuel duty on the UK economy. Their report estimated a 2.5p reduction in fuel duty could result in the creation of 175,000 jobs within one year and 180,000 jobs within five years of such a reduction.
1. Scrap the August fuel duty hike
Significantly, a 2.5p reduction would not result in any fiscal loss to the Government, while GDP would receive a boost of 0.32% within one year and 0.34% within five years. And a 5p reduction in fuel duty could generate an additional 200,000 jobs at a net annual cost to the Treasury of around £1.2 billion in the first year, falling to a cost of £1.0 billion within 5 years.
2. VED - keep it downWhile the news bandings have been good news for many new car owners, the Chancellor may be tempted to hike VED again on higher-banded vehicles. The recent spate of severe winters has seen many people purchase higher CO2-emmitting 4x4 vehicles. Any price increases should be limited to below the retail price index.
3. Cap Insurance Premium TaxThe AA's motor insurance premium index claims premiums climbed more than 15% between December 2010 and December 2012. "We hope rises," says the AA, "will continue as much lower levels than the previous year. given the continued uninsured driver problem and the higher premiums from most, especially younger drivers, we believe the IPT should not be increased again."
4. Keep the 'plug' in £5,000 electric vehicle grantThe electric car grant was confirmed in December 2010. Although the take-up of electric vehicle cars remains slow, £5,000 grants like these can really make a difference long-term, cutting the price of vehicles like the Nissan Leaf and Toyota Prius significantly.
5. Review the oil, refining and wholesale fuel marketsAll sorts of odd things are going on in the European oil industry. A lot of the diesel price rises are down to refining capacity moving to Eastern Europe, making UK supply more volatile. Diesel refining, for example, is thought to be at its lowest level for several years. And while price is soaring, the supply is dropping. This needs a hard look.
In fact, the House of Commons is looking at this area; it published this research note last week.
Summing up, RAC spokesperson John Franklin told AOL Money that the Chancellor "at the very least must scrap the planned duty rise in August which will add a further 3p a litre. On top of this he has to look at how he can really help drivers, families and business by doing something to control these prices."
"He gets increased income from VAT when fuel prices rise - surely he can use this to lower the duty. Enough is enough for motorists and it's time the Chancellor took some real action to help."
The Highest Fuel Duty in the EU! (Figures from FairFuelUK)