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Budget update: motorists are saving £10 – or are they?

Published on 23.03.15

With the general election so close, it was no surprise that the Chancellor, George Osborne, was framing today’s Spring Budget Statement in sound bites. But unfortunately, you won’t find your tank of fuel is £10 cheaper tomorrow as a result.

The headline-catching phrase refers to the cancellation of the fuel duty increase planned for September, making this the longest fuel duty freeze in over 20 years. The effect of this, over several years, is what accounts for the claimed £10 saving, or more accurately, the postponement of £10 worth of duty rises.

No actual giveaways

Despite the looming election, there were very few giveaways in the budget, with the Chancellor preferring to use his £6bn windfall from bank share sales, lower inflation and lower welfare payments, to pay off some of the national debt.

After a populist ‘1p off a pint beer’ duty reduction (no good if you are driving!), there wasn’t much left to give for the hard-pressed British motorist. In fact, only one direct saving was actually announced.

Toll rates on the Severn Crossings will be reduced from 2018, with the higher rate for buses and small vans abolished.

Infrastructure investments for motorists

Motorists will be helped in the long term by a number of infrastructure investments, including £7bn for roads, rail and air links to the South West and a ‘comprehensive transport strategy’ for the so-called Northern Powerhouse.

Manchester will also gain control of its transport budget as part of the devolution of powers to its new elected mayor.

Cash for the future

£100 million was pledged to help Britain’s automotive industry to “stay ahead in the race for driverless cars”, while low emission vehicles were supported with a promise that company car tax would rise “more slowly” on less polluting cars – though no specific figures were given.

The Chancellor also pledged to support the ‘Internet of Things’ (his phrase), which envisions the interconnectedness of machines and devices via the internet. This has wide reaching implications for the motor industry, facilitating everything from increased security to pre-emptive problem spotting by your local dealership.

But nothing new for now

Overall, there was less in the budget for drivers than there was for church roof repairs (which had their spending trebled!), and with such a short time left for this parliament, even the little that there was may not end up being implemented.
Most drivers who were hoping that the Chancellor would try and buy their vote by cutting the cost of motoring will be pretty disappointed, though any help is welcome, according to Professor Stephen Glaister, director of the RAC Foundation:

“With fuel duty revenue making up about 5% of the Treasury’s tax income there was never going to be a huge giveaway, as the Chancellor still desperately needs motorists’ money. But with the latest figures showing that almost a million of the poorest households see a quarter of what they spend go on buying and running a car, the continued freeze is still very welcome,” he commented.


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