Chancellor Autumn Statement: Good & Bad News for Motorists
A rise in insurance premium tax and the cancellation of the proposed fuel duty increase are among the measures affecting motorists in today’s Autumn Statement by the Chancellor of the Exchequer. Philip Hammond told the House of Commons that the tax will go up from 10 per cent to 12 per cent, and the government will change the laws regarding whiplash compensation, which it is claimed will save motorists an average of £40 per year.
He also announced that the proposed 2p per litre fuel duty rise, planned for next April, would now be pushed back until April 2018. “Today we stand on the side of millions of hard-working people in our country by cancelling the fuel duty rise for the seventh successive year,” he said. This will save motorists an average of £130 per year, and the average van driver £350 per year. The current fuel duty freeze is now the longest the UK has witnessed in 40 years.
Commenting on the insurance premium tax rise, RAC director of insurance Mark Godfrey said: “After a recent double rise in insurance premium tax, this further increase is a slap in the face for motorists who will surely see their premiums once again increase. It will mean three rises in two years and a more than doubling of IPT from five per cent to 12 per cent making insurance premium tax the stealth tax of our time.
“Insurance premiums have already risen by over £100 compared to last year, and motorists have told us they are feeling the pinch, with 57 per cent telling us that their premiums have increased over the past 12 months. We are also concerned that the government’s whiplash reforms, while welcomed, will not achieve savings for motorists, as only a small number of insurers have so far committed to passing the savings on.
“The Chancellor may now be at risk of encouraging some hard-pressed motorists to break the law by driving without car insurance, which will further increase premiums for law-abiding drivers. We would urge the government in the name of road safety to reconsider this rise.”
Meanwhile, RAC fuel spokesman Simon Williams said: “The Chancellor’s commitment to freeze fuel duty will be greeted with relief by motorists and businesses at a time when we know drivers are concerned that fuel prices will rise significantly over the next six months – which might be the case if oil-producing countries that are members of OPEC commit to an oil production cut when they meet this time next week.
“The Chancellor’s decision to extend the freeze shows that he understands that motorists are the backbone of the British economy. It is vital that in such uncertain times, the government can give as much certainty to them as possible.”
Hammond has also pledged an investment of £1.1 billion to help develop English local transport networks, where he said “small investments can often offer big wins”. He said: “Reliable transport networks are essential to growth and productivity. So this Autumn Statement commits significant additional funding to help keep Britain moving now and to invest in the transport networks and vehicles of the future.”
An additional £220 million has been pledged to help address traffic pinch points on strategic roads around the country.
The government will also dedicate £390 million to ensure the UK can build on its competitive advantage in low-emissions vehicles as well as the development of connected autonomous vehicles. There will also be a 100 per cent first year capital allowance for the installation of electric vehicle charging infrastructure.
Hammond also announced the government’s intention to commit to the delivery of the Oxford-Cambridge Expressway, and said it would carefully consider the final recommendations of the National Infrastructure Commission in due course. He said the expressway “can be more than just a transport link, it can become a transformational technology corridor, drawing on the world-class research of our two best-known universities”.