2012 Budget For Motorists
This afternoon’s budget did not provide any respite for Britain’s hard pressed motorists as fuel prices are still set to increase later in the year and VAT remains at 20%. Motoring groups had lobbied for the planned increase to be waived or reduced.
Fuel prices will go up by 3.02p to around 138p per litre of unleaded from August 2012 and diesel will increase to around 146p, based on average prices supplied by the AA. George Osborne’s decision not to freeze or reduce the amount of tax drivers in the UK are paying on fuel continues the upward trend in fuel costs that we have been seeing since the spring of 2010.
All of this comes despite pressure from drivers who are reliant upon fuel to keep their businesses afloat, sparking fears that the country could again witness fuel protests similar to those which occurred in 2000. Those protests were primarily lead by farmers and HGV drivers who could ill afford increasing fuel prices and, only after much disruption, eventually resulted in a freezing of fuel duties by the incumbent government.
Considering that Nigel Evans, Deputy Speaker for the House of Commons, recently stated that rises in the cost of car insurance could impede young people from taking up jobs in the UK, this news does not show encouraging signs that the government are giving priority to bringing down the cost of motoring.
Reactions to the news from the budget have included some motorists claiming that they may have to quit or change their jobs due to increasingly unaffordable commuting costs, which will undoubtedly have a knock on effect upon wider economic issues.
All of this paints a rather depressing picture for the UK’s motorists. Car insurance costs are not within the Chancellor’s remit, with the exception of Insurance Premium Tax which remains at 6%. However, as we have been documenting within our car insurance price monitor, Tiger Watch, there is better news for drivers in that we are seeing prices dropping both month-on-month and year-on-year. Given the inflation seen in 2010 and early 2011 though, it is questionable whether this alone is enough to instill much confidence in a somewhat beleaguered country of motorists.