With transport identified as the biggest source of expenditure for UK households, the government’s plans for the motoring industry are no doubt of great significance for most of us. Following the announcement of the 2016 budget on Wednesday 16th March, it seems that British drivers can expect to save in some areas whilst spending more in others. Let’s take a look at some of the key points outlined in the budget and what they mean for road users over the next few years.
Fuel duty remains frozen
One particular announcement that was reportedly met with cheers in the House of Commons – and will no doubt have motorists cheering themselves – is that fuel duty will not go up. This marks the sixth consecutive year that fuel duty remains unchanged, despite plummeting petrol prices over the last twelve months. Commenting on the decision, which is estimated to save the average driver £75 a year, Mr. Osborne stated that “Families paid the cost when oil prices rocketed; they shouldn’t be penalised when oil prices fall.”
Severn Bridge toll to be halved
Another welcome measure for many will be the plan to reduce the cost for vehicles travelling from England into Wales via the Severn Crossings. Having paid heed to his Welsh colleagues, Osborne plans to cut the fee by 50% from 2018 onwards, taking it from £6.60 per car to a much more affordable £3.30. In addition to motorists themselves, this will no doubt be good news for Wales’ residents who stand to benefit from the potential boost to the economy.
Insurance premium tax to rise
Despite these driver-friendly revelations, one area where motorists can expect to pay more is insurance. The insurance premium tax (IPT) is set to rise by half a percentage point, taking it up to 10% as of October 2016 and marking the second hike in just a matter of months, as November 2015 saw it increase from 6% to 9.5%. This latest increase comes hand-in-hand with the government’s pledge to polish up its flood policy in response to ongoing criticism. The extra funds raised will go towards delivering flood defence schemes and safeguarding Britain’s most vulnerable areas, an operation that will cost over £700 million.
Despite continued savings at the pump, this second hit to insurance will no doubt come as a hard financial blow to motorists – and older drivers in particular. Whilst some aspects of car ownership offer cost-saving alternatives, such as ordering car parts from specialist websites like Mister Auto in order to avoid garage fees, insurance is mandatory; aside from shopping around for the best deal possible, the financial ramifications are largely unavoidable.
More information on the 2016 budget can be seen on the official gov.uk website.