Budget 2014: what does it mean for motorists?

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George Osborne in a JaguarBritish drivers have been given some respite from George Osborne. The threat of a fuel duty rise has been banished in the Chancellor's new Budget. Osborne claims fuel prices are now up to 20% lower than they might have been under Labour. The motoring news was broadly expected. What else does the Chancellor offer - or take away - from British motorists?

Are they better off in any meaningful way really?



Still squeezed?

With no cut in fuel duty, most will feel little change. The AA isn't impressed: "Keeping fuel duty level for a fourth year is very welcome relief for UK drivers but the freeze still leaves the squeeze on families and businesses that rely on four wheels to function and prosper."

It adds: "Now that we know, from official figures, that inflation-hit earnings are effectively at 2002 levels and car use is struggling to revive, perhaps a short-term cut in fuel duty would have got the UK properly mobile again."

However if UK wages continue to rise - as some claim - then the freeze turns into a cut. But the rate of growth is extremely slow.

Osborne is hiking vehicle excise duty by the rate of Retail Price Inflation (generally higher than Consumer Price Inflation) from 1 April. Realistically, that means most road tax bands (D to K) will climb by around a fiver and the higher bands, L and M, will increase by a tenner. For those running cars in the A, B and C bands, no change.

40+ exemption

Older vehicles get some respite from a new rolling VED exemption, though they have to be more than 40 years old to qualify.

The 5p a litre rural fuel duty rebate scheme gets an extension for 17 remote UK locations (EU approval is still being sought). If your car has suffered from potholes, there's better news: there's now a £200m pothole fund for local highway authorities to bid for funding from.

Don't expect that money to make a huge difference though, given that there is billions currently still to be spent on outstanding repairs on UK roads. But it's a start, at least, to acknowledging the damage potholes do to many vehicles.

BIK changes

For company car drivers, Osborne pushes ahead with the 2% BIK increase in company car tax in 2017-18 and 2018-19. However he is upping the discount for ultra low emission vehicles, and slashing the rate of fuel duty on methanol.

Still, if you drive a zero-emission vehicle that currently pays out nothing at all in 2014/15, you'll be motoring cleanly, quietly into the 13% tax band by 2018/19.

For the M4 in Wales there's improvements promised and a £270m guarantee for the Mersey Gateway toll bridge (Runcorn-Widnes).

Overall, somewhat underwhelming. "AA research," says Edmund King, the AA's president said, commenting on Osborne's changes, "shows that 70% of lower-paid workers, pensioners and young workers who have to drive to their first jobs are still forced by relatively high pump prices to cut back on car use, other spending to compensate or both."

Recent research from from Motors.co.uk claims almost 90% of motorists worried about the cost of UK motoring would not vote for a party that didn't highlight motoring policy as a major issue.

More than half (54%) of 2,000 surveyed by YouGov believed the adoption of EU standards and levies has upped the cost of running a car in Britain.