Thursday 17th March 2005

Chancellor's budget freezes fuel tax

RAC Foundation welcomes prudence at the pumps

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The RAC Foundation welcomed the Chancellor’s decision to put the brakes on fuel duty increases for six months and to freeze vehicle excise duty for smaller cars, describing it as 'prudence at the pumps'.

Freezing fuel duty for a further six months will help Government regain the confidence of motorists who already pay £42 billion on motoring taxes whilst only £6 billion is spent on roads.

Inflated world oil prices have caused hardship for many impoverished families around the UK. Low-income motorists already spend 24 per cent of their household outgoings on motoring.

Edmund King, executive director of the RAC Foundation said, "The Chancellor has shown prudence at the pumps. Freezing the level of fuel duty will help the Government to regain the confidence of motorists, but will still leave drivers vulnerable to world petrol price rises.

"Fuel duty is a regressive tax which hits those hardest who can least afford it. The Chancellor has already benefited from increased VAT receipts due to the higher cost of fuel.

"The Chancellor has been shrewd as well as prudent this Budget. He obviously is aware of the voting power of 32 million motorists around the country".

The Chancellor also announced:

• Insurance Premium Tax: the Foundation welcomed the freeze on IPT as the problem of uninsured motorists has grown to 2 million motorists.
• Alternative fuels and incentives: the Foundation welcomed the continued duty incentive for greener fuels.

The RAC Foundation is still concerned that not enough of the current taxation is going into road investment. It issued a statement pointing out that:

• Roads are by far the most important mode of transport as 92 per cent of passengers and 81 per cent of goods moved travel by road and will continue to be so in the next 30 years.
• Firm plans, timetables and targeted expenditure need to be put in place to facilitate much needed improvements to the road infrastructure over the next couple of decades.
• Motorists are becoming increasingly frustrated by the growing congestion on our roads, and the economy is suffering as a result, costing the country at least £15 billion a year.

The RAC Foundation has identified a list of urgently needed improvements to the strategic road network, which at a cost of around £2bn a year over 10 years could all be paid for out of one year’s motoring taxation.

[imperialgreen]

6 months - pah big deal. Only lowering the tax permanently would increase the confidence of motorists in this government

[minornut]

Of course there's no mention of the tax increase for North Sea Oil Co.s which will mean price increases and consequent increase in VAT revenue for 'Gordo the Great Wallet Emptier'

[g0kyk]

While he has frozen tax for smaller cars, he has not said what he is going to charge for larger cars and the older ones prior to the sliding scales.
Are we going to pay for others savings??
Ray 2.5TD motorhome, 2,000 miles per year plus 1.950cc peugeot TD estate 2000 miles per year. so was £165 times 2. Now what.

[johnp68]

nothing to do with an election coming up, surely

[_VTEC_]

johnp68 said:

nothing to do with an election coming up, surely.

Hmmm yeah I wonder.

Just more hollow BS in order to woo voters come GE.