Budget 2013: a breather for UK motorists?

CarsWe'll know soon enough if George Osborne will suspend the planned autumn fuel duty hike, worth around 3p a litre. Osborne, mindful of the pain it would inflict - wage inflation continues to stay stubbornly low and a weaker pound doesn't help - is thought likely to scrap it, though no guarantees.

So could the Budget, broadly, bring a smidge of light for motorists?%VIRTUAL-SkimlinksPromo%

    Pain relief

    The AA claims the average UK pump price of petrol has recently swung from 132p to 140p a litre since the start of the year. "In the past month alone the average UK cost of petrol has gone up from 138.32p to 139.91p a litre, culminating last week in the latest price surge, peaking at 140.03p," says the AA.

    The AA's Luke Bosdet says that though the Chancellor doesn't have to move on fuel duty till September, "it wouldn't surprise me if he didn't defer it," he told AOL Money. "It just depends on what sort of message he wants to send."

    VED itch

    He goes on: "If he [Osborne] wants to talk about improved childcare, he may want to say that it's not a giveaway budget. But we've had three very big swings in petrol prices in 12 months, each time between 8p to 12p a litre."

    Osborne could meddle with VED bands. Currently cars, for example, that emit up to 100g/km CO2 are classed in Band A and are exempt from VED. Car manufacturers however are ramping up their number of VED 'A' band cars available to the public.

    VED raises around £6bn a year and as more consumers plump for lower emission cars, that figure is under pressure (Government officials have had private talks with the motoring industry on the issue). So Osborne will have to fight to scratch the itch.

    Insurance hike?

    "He's committed to consulting on VED says Bosdet, "and so far that hasn't happened, so we'd be somewhat surprised and angered to tinker with VED without consulting." Watch out, though, for new incentives for ultra-low emitting vehicles.

    There could however be a nasty little nip with a rise in Insurance Premium Tax (IPT) which, again, would hit younger drivers harder. Currently the annual average premium for a 17-18 year old driver is around £1,850 a year.

    Recently some insurance players claimed insurance premiums for young newly qualified drivers could fall by around 15-20% were the Government to act on the ABI's Safe Young Driver proposals.

    These include:

    • One year minimum learning period for young drivers
    • Limiting the number of young passengers and restrictions on night time driving for young drivers for an initial period after passing their driving test
    • Zero blood alcohol driving limit for an initial period after a young person passes their driving test

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