Budget 2013: Motorists get a breather


Budget 2013: What it means for you

UK motorists have been delivered a boost. George Osborne has scrapped September's fuel duty hike. For a car such as a Vauxhall Astra or Ford Focus, Osborne claims, that will be worth around £7 every time the tank is filled.

However Capital Economics claims that this will likely cost the Treasury £0.7bn. What about other good news for drivers?

Break for UK drivers

Osborne claims there will also be new tax incentives for ultra low emission vehicles, though details are scant currently. The AA claims had Osborne had gone ahead with the hike it would have lifted the cost of a 70-litre Ford Mondeo tank of petrol from £97.12 to £99.64 (based on the current average UK petrol price of 138.74p a litre). So some relief for British motorists.

The move also mean that the Government has frozen every scheduled fuel duty rise scheduled since 2010. The cancellation of the 3p increase on litre of petrol and diesel means the cut will be retained at 57.95p until at least the autumn of 2014.

Not enough?

"This was a cost of living Budget," said Harlow MP Robert Halfon. "It has put fuel in the tank of the British economy. I'm glad that the Chancellor has listened again, and helped the millions of car-owners and businesses who are struggling to fill up their family car. Fuel duty is a toxic tax. It hits the poorest Brits the hardest. We have to keep petrol and diesel prices down."

The UK Fair Fuel campaign welcomed the move. "It is a sign that the Government is listening, but there will be widespread disappointment that the cancellation of this duty rise gives them no immediate relief from climbing fuel prices. Cancelling a rise that really shouldn't happen is not enough."

Company car changes

"The Government," added Fair Fuel campaigner Quentin Wilson, "needs to cut duty substantially to get the economic growth we all need."

Green Flag said that while "the cost of motoring is a constant concern, it will be a relief to millions of motorists that there is some respite against the escalating financial burden of owning and running a car."

For company car drivers, Osborne is introducing two new benefit-in-kind bands. One will be for ultra-low emission vehicles in a 0-50g/km CO2 band; the second band will go from 51-75g/km CO2. This means a 5% band for 2015/16 and 9% for the higher band. Following years will see further rises.

Treasury fuel duty receipts – financial years - AA figures

2011/12 - £26.80bn from 50.60 billion litres of fuel
2010/11 - £27.26bn from 51.70 billion litres of fuel
2009/10 - £26.20bn from 52.83 billion litres of fuel
2008/9 - £24.62bn from 54.15 billion litres of fuel
2007/8 - £24.91bn from 56.17 billion litres of fuel
1997/8 - £19.46bn from 57.59 billion litres of fuel
1991/2 – £10.99bn from 63.40 billion litres of fuel

Budget 2013: Winners and Losers

Budget 2013: Winners and Losers