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Motoring news

Motoring groups' cautious welcome for Pre-Budget Report

10/12/2009

Motoring organisations have given a broadly positive reaction to the Pre-Budget Report, delivered yesterday by the chancellor.

Among the key announcements in the report, which sets out the direction of next spring's budget, Alistair Darling confirmed that electric cars would be exempted from company car tax for five years, and that there would be no further increases in fuel duty, other than those already planned.

Car makers were quick to welcome the electric vehicle incentives, which are due to apply from April 2010. The Society of Motor Manufacturers and Traders said it was "pleased" with the investment and support for low-carbon technologies.

In addition, charities the RAC Foundation and Campaign for Better Transport - not often given to agreement - independently welcomed the support for electric company cars. However, Better Transport executive director Stephen Joseph added that a "clear strategy" was needed to make public transport - seen as a greener alternative - cheaper.

Reaction to the report was not universally positive, however, with the RAC Foundation adding that the outlook for road maintenance was "bleak", and that motorists' relief at the lack of fuel duty rises would be "short-lived".

"VAT will return to 17.5% on 1 January, and that means the current price of a litre of unleaded petrol will go up by 2.5p," said director Professor Stephen Glaister.

"And all this is before the 1p above-inflation rise already planned for April, and speculation of a further VAT increase after the election."

Meanwhile, an article in The Telegraph highlighted that by 2012 some drivers of conventionally-fuelled company cars would be hit by three separate tax increases. It calculated that together they would cost a Mondeo-driving higher-rate (40%) taxpayer £336.78 by April 2012.