The past week has been a busy one in the UK, not just for the automotive industry but the economy and the public as well following the budget announcement. We offer a whirlwind tour through the last seven days.
Budget
On Wednesday, Chancellor George Osborne revealed the government’s financial plans over the next year and fuel costs figured high on the agenda.
Superficially the announcements sounded brilliant for UK motorists with the coalition announcing a 1p per litre reduction at the pumps as of the 23 March and a scrapping of the fuel duty escalator which had increased fuel duty along with inflation since 1993.
Osborne also promised a Fair Fuel Stabiliser which would cut the cost of fuel in the face of oil price fluctuations.
Unfortunately the ‘6p per litre’ savings - that a bullish Osborne declared - sound better than it actually is as it won’t translate into obvious savings for the motorist.
Why?
The 5p per litre fuel duty savings and the 1p per litre forecourt price cut are more theoretical and hint at the build-up this particular budget received.
The potential 5p fuel duty increase only a theoretical increase if the April fuel duty escalator went ahead. This has now been postponed until next year when two inflation-level fuel duty rises will swallow any perceived savings made this month.
In terms of actual fuel prices at the pumps, the 1p reduction in fuel duty is the only thing that will affect forecourt prices.
So, although it was welcome news for motorists, they are only saving an actual 1p per litre at the pumps.
Reaction
Reaction to the budget has been mixed with the general opinion being that it has done some good but not quite enough to garner praise as the government tightens its belt.
The likes of the AA and the Society of Motor Manufacturers and Traders (SMMT ) have all had their say with a general consensus being voiced.
Implications
In the case of fuel prices it’s business as usual for British motorists – fuel prices have risen dramatically over the past 12 months by around 15 per cent and the trend looks set to continue over the coming months with inflation and further rises.
It wasn’t just fuel costs that were impacted on by the budget. Road tax –VED - has also seen a small increase at the rate of inflation across all bands.
Company car tax (benefit-in-kind tax) was also hit by the budget with Osborne outlining a change in exemption criteria from 120g/km to 100g/km.
That means more cars will be taxed and companies will have to spend more money to finance their fleets.
There was slightly better news for company car users as the Approved Mileage Allowance Payments was altered. The rate of tax free payment was bumped from 40p to 45p.
A mixed bag for British motorists.