Chancellor George Osborne extends the freeze on fuel duty in his annual Budget; cars over 40 years old now exempt from road tax on a rolling basis

Chancellor George Osborne has made good on his promise to freeze fuel duty until May next year in his latest budget speech.

Announcing the freeze in parliament today, Osborne confirmed that the planned rise in fuel duty in September would not take place. He noted that thanks to the freeze, petrol will be on average 20 pence per litre less expensive than it would have been under previous labour plans.

A new fund of £200 million was also announced to help local councils repair potholes on some of the UK's worst roads.

Speaking in the House of Commons, Osborne said: "If you're a maker, a doer or a saver: this budget is for you. This is a budget for a resilient economy."

Classic cars will now also be road tax exempt from the age of 40 onwards. The new policy will come into play on April 2014, at which point any car made before 1 January 1974 will be exempt.

Car tax is set to rise, with cars emitting more than 75g/km of CO2 increasing by two per cent, up to a maximum of 37 per cent of list price. The government has also said it remains committed to reviewing incentives for ultra low emission vehicles in the future.

The chancellor additionally confirmed plans to make road tax payable on a monthly basis, with any remainder required to be cashed in before a car is sold privately.

Answering the call of British-based businesses to encourage growth, Osborne said the government would double the amount of lending available to export companies to £3bn. Grants for small businesses were also extended to support 100,000 new apprenticeships across the country.

"I want the message to go out so that wherever you are in the world, you cannot fail to see the phrase made in Britain," said the Chancellor.

The Chancellor also revealed revised growth forecast figures for 2014, which move up from 2.4 to 2.7 per cent.

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Comments
6

17 March 2014
Yet more crazy ideas from the Tories. VED isn't a road tax, it's an environmental tax, it's based on the Co2 your car produces. The whole idea of the tax was to lower emissions and get people in to cleaner cars. So then if there's no increase in fuel prices, someone who covers 50,000 miles a year pays the exact same increase as someone who covers 5000 miles a year and uses say his bike to travel to work. If they want to save the environment, let the people who pollute the most pay the most. ie scrap VED and put the tax on fuel.

18 March 2014
road tax is being scrapped , but I totally agree with scotty 5, put the duty on petrol and make the high mileage motorist pay a greater portion, the higher the mileage the more you pay.

18 March 2014
So we have two people who tell us the higher mileage you do the more you pay,my word how stupid can you be?.
What about the company who deliver to the supermarket the shop the factory,these people do
very high mileage due to the job they do,You put the cost of fuel up the cost of things you buy goes up,i bet these two would soon be on the webb to have a right go.There are times when I wonder

19 March 2014
kendwilcox47 wrote:

So we have two people who tell us the higher mileage you do the more you pay,my word how stupid can you be?.
What about the company who deliver to the supermarket the shop the factory,these people do
very high mileage due to the job they do,You put the cost of fuel up the cost of things you buy goes up,i bet these two would soon be on the webb to have a right go.There are times when I wonder

Precisely. Some do not have a choice when it comes to their mileage. If the fuel were to go up, these people would be spending even more when it is already a stretch to keep filling their car up thanks to the higher mileage that they already have to travel. If you do a lower mileage, you're paying for less fuel anyway, so go figure!!!


"Work hard and be nice to people"

19 March 2014
martinreds05 wrote:

road tax is being scrapped , but I totally agree with scotty 5, put the duty on petrol and make the high mileage motorist pay a greater portion, the higher the mileage the more you pay.

Why should a higher mileage driver pay more? Say they drive a more economical vehicle and have no other way of getting to work, should they really be penalised for that? Someone else with a fuel-guzzling SUV that travels less miles might pollute more. Why should they get away with that?

Not everybody has access to good public transport, so people shouldn't be penalised just for having to drive further.


"Work hard and be nice to people"

18 March 2014
I used to agree, but thinking about it, I disagree now.

I do around 20k miles a year in two cars. We live 23 miles from work, and the vast majority of this mileage is for work.

Tax on fuel is between 60 and 70% as far as I remember, so my high mileage is already causing me to pay more tax, and for me that's roughly £1,700/year in tax. Someone doing quarter of the mileage is clearly paying £425/year, so I'm already paying £1,275/yr more than the lower mileage driver.

So in my biased opinion I think it's actually OK to put incentives in place via VED rates to lower overall CO2 - the difference between an average car and high polluter is around £350 in VED isn't it? If this wasn't in place it would be governed by fuel consumption and affordability, and for me it's a stronger message for CO2 to have a separate and visible tax. Having said that, I'm a climate change sceptic anyway, on the basis that I don't think humans are smart enough to understand or make calculations on something with as many known and unknown variables as the climate.

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