Budget 2014 reaction19 Mar 2014

Fuel duty freeze continues

The Chancellor has confirmed that fuel duty will remain frozen for the remainder of this parliament.

He made the announcement in his speech at Budget 2014 with full details outlined in the budget document.

This means the level of duty on both petrol and diesel will stay at 57.95p per litre. It has been at this rate since March 2011.

Reacting to the duty freeze Professor Stephen Glaister, director of the RAC Foundation, said:

“The good news is that fuel duty has now been frozen since March 2011. The bad news is that the UK’s 37 million drivers still pay the highest proportion of petrol and diesel tax in Europe.

“The Treasury’s own analysis shows cuts to duty would boost the nation’s economic output. 

“Yet the stubbornly high pump prices mean transport costs remain a real concern for the record 18 million people who rely on a car to get to work.

“For those offered low paid employment there is a real question mark over whether they can afford to take it up with travel still so expensive.”

The latest fuel prices and breakdown of what you pay at the pumps is available on the RAC Foundation data pages.

Professor Glaister also commented on the £200 million being made available to help fill in potholes.

“A succession of bad weather, including the recent floods, has wrought havoc on our roads and any money to fill the potholes is welcome. But the drip, drip of funding does not address the £10 billion road maintenance backlog that councils themselves have identified. It is also disappointing that this money has to be bid for. This creates a bureaucratic burden and means not all councils and drivers will see the benefits.”

The Chancellor also confirmed that VED would rise by inflation from 1 April though a new rolling VED exemption for classic cars will be introduced at the same time:

VED rates for cars, motorcycles and the main rates for vans will increase by RPI from 1 April 2014.

The government will introduce a rolling 40 year VED exemption for classic vehicles from 1 April 2014.”

There was confirmation that the Treasury has applied that the rural fuel duty relief granted to ten areas in the Highlands and Islands be extended to 17 areas on the mainland.