Budget 2012 comment 21 Mar 2012

Chancellor announces VED review while going ahead with fuel duty rise

The Chancellor has confirmed the 3p rise in fuel duty planned for August 2012. Future annual rises will be inflation only unless the price of oil falls significantly and for a sustained period, in which case rises will be inflation plus one percent.

Commenting on the Budget statement, Professor Stephen Glaister, director of the RAC Foundation, said:

“The Chancellor’s decision to go ahead with the Summer rise in fuel duty is as unsurprising as it will be disappointing to 34 million drivers, especially when the Chancellor acknowledges there is likely to be a further spike in oil prices.

“George Osborne said that taxes should be fair, simple, predictable and support work. Motoring tax fails on at least three of these measures and it is time for a review of exactly what fuel duty is for and who it impacts most.”

The Chancellor also said:

“I am increasing Vehicle Excise Duty by inflation only. To encourage fuel efficient fleets, we will extend the 100 per cent first year capital allowance for low emission business cars, reduce the CO2 threshold for the main capital allowance rates; and increase the percentage list price of company cars subject to tax. I can also announce that I am again freezing VED for road hauliers.”

Mr Osborne added that there would be a review of VED over the medium term to “ensure that all motorists continue to make a fair contribution to the sustainability of the public finances, and to reflect continuing improvements in vehicle fuel efficiency.”

it was also revealed in the Budget that the Bexhill to Hastings Relief Road would go ahead and that decisions on four more major local road schemes would be made by the end of May.

ENDS

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