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Highlights of the Autumn Budget Statement

Published on 17.12.15

Chancellor of the Exchequer, George Osborne, delivered his planned Autumn Statement to Parliament on Wednesday 25th November, announcing the biggest increase in capital spending at the Department of Transport ‘in a generation’!

£61bn for transport infrastructure

The Autumn Statement included an increase of 50% in the Department of Transport’s annual capital spending budget, rising to £61bn, which Mr Osborne said was to going to be used to “invest in the roads Britain needs”.

It’s good news for motorists but in fairness, this figure will also include significant spending on the HS2 rail link and electrification of many other rail lines. It also covers £11bn for “London transport” and investment in “transport for the North” both of which cover everything from trams and trains to new smart motorways. Nonetheless, it is the largest transport investment programme we’ve seen since the 1970s.

Who will benefit?

There were a number of specific schemes to help road users mentioned in the Chancellor’s statement, including:

No changes in road tax

Since this was a statement on spending, in contrast to the formal Budget delivered in the spring, there was little mention of specific motoring costs such as Vehicle Excise Duty (road tax) or the tax on fuel. That said, the figures released after the statement by the Office of Budget Responsibility hinted at increased revenues from fuel duty, so a rise is not far away.

Important changes to insurance

We will all feel the impact of a previously announced rise in insurance premium tax as our car insurance comes up for renewal. This tax went up from 6% to 9.5% on 1st November 2015, resulting in a rise of £13 per year on the average car insurance policy, and much more for younger motorists and those in higher risk groups.

However, there was some good news in the statement to make amends, as the Chancellor announced the end of the compensation culture, removing the right to general damages in cases of minor soft tissue injuries. With around 1,500 claims a day flooding the system, it is estimated that this will save the insurance industry £1bn per year, which Mr Osborne said should be passed on to customers. This should result in a saving of around £40 to £50 per car insurance policy.

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