Dominic Browne 05 December 2013

AS2013: Chancellor announces further relief for motorists

Chancellor George Osborne kept true to form in today’s Autumn Statement, with tax relief for motorists forming a central plank of the Government’s transport announcements.

Mr Osborne announced a freeze in fuel duty for the remainder of this Parliament, by cancelling the increase planned for September 2014, saving the average motorist £11 every time they fill their tank by 2015-16.

Average pump prices will be 20ppl lower by the end of the Parliament than under pre-2010 plans, the chancellor claimed.

Describing the policy as a ‘priority’ for this Government Mr Osborne said the freeze in fuel duty was ‘a £22bn commitment’ over the life of this parliament to businesses and families.

‘We inherited the hated Fuel Duty Escalator, causing hardships for families and businesses alike. We abolished the escalator and have cut and frozen fuel duty. Because we have made the difficult decisions, next year the rise in fuel duty will be cancelled.’

Also in a fiscally neutral budget that still tried to find help with the cost of living, Mr Osborne announced that train fares will see an average rise in line with inflation next year, cancelling a previous plan to put them up by 1% above inflation.

The Autumn Statement document reads: 'This will benefit over a quarter of a million annual season ticket holders who will, on average in 2014, save £25. For instance, an annual season ticket from Chelmsford to London should be around £35 less in 2014 than it would have been without this change whilst an annual season ticket from Oxford to London should be around £45 less. This measure will complement the decision by the Mayor of London to cap the average increase in Transport for London fares at RPI for 2014.’

It also confirmed that the paper tax disc would be abolished, ‘removing an administrative inconvenience for millions of motorists’. This move is expected to save drivers around £20m a year.

The statutory maximum price of the MOT test for a car will also be frozen at £54.85 until 2015, delivering a total saving of £50m for motorists.

The Department for Transport will have to take its share of £3bn of departmental savings over the next 3 years. Although this will not apply to the DCLG as councils are expected to freeze council tax once again.

Also alongside the announcements on infrastructure released by the Treasury yesterday, Mr Osborne committed the Government to expanding transport networks stating: ‘We need the new roads, new rail, including the northern hub and High Speed Rail 2.’

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