Motoring Budget

A two-year freeze in public sector pay, severe cuts to welfare spending and a VAT hike, the budget has given us all something to grumble about, but does it mean for motorists?

In line with Alistair Darling's suggestions in the March budget fuel duty will go up a penny per litre in October and a further penny in January 2011. Add to that the 2.5% increase in VAT and motorists will be paying around 4.5p litre more at the pumps come January, when the VAT rate is set to rise.

Although new and used car sales in Scotland and England are unlikely to suffer, the VAT hike is bad news for buyers holding out for 2011 models as prices will increase by as much as £300, on some new models. Motorists can also expect to pay more for servicing and parts.
In the bigger picture transport funding cuts, of more than 25% by 2014, could have a negative impact on road safety measures, according to Road Safety charity break.

Severe cuts in the capital grant, which is used for road safety engineering measures such as pedestrian crossings and speed humps, and the revenue grant, which is used for local authority-led local road safety partnerships, are likely to contribute to a rise in road casualties says the charity.

In a bid to encourage foreign investment to help the UK car manufacturing industry the new coalition government will cut corporation tax by 1%. There was no mention of new grants for electric vehicle purchase or of road charging though.

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