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AA warns Chancellor over pre-budget report

08 December, 2009

The AA has warned the Chancellor not to pull any 'tricks out of his box' to hammer the motorist in a pre-Christmas stunt. The organisation pointed out that since the last pre-budget report fuel

duty had already risen by 5.84p a litre, adding that Alistair Darling should not be looking to revise his plans on fuel duty.
AA president Edmund King said: “Petrol and diesel in the UK are already heavily taxed so we don’t want to see the Chancellor pulling any tricks out of his box to hammer the motorist.

"We are concerned that for political reasons he may try to get away with an immediate fuel duty increase rather than wait for the forecast 1p increase next April. This could hinder economic recovery because as a nation we are dependent on road transport for getting goods to our shops and ports and for 90% of passenger travel.  It would also undermine consumer spending that will underpin economic recovery.”

At the last Budget the Chancellor announced fuel duty would increase by 1p per litre in real terms on 1 April each year from 2010 to 2013.

Regarding Vehicle Excise Duty, he said that from April 2010 the Government would further separate out the thirteen different bands in order to strengthen the environmental signal, and from April 2010, differential First-Year Rates of VED (Showroom tax) for new vehicles would be introduced.



AA Pre-Budget Report Fact-File:

1) Fuel duty increases from last Pre-Budget Report (PBR)  = 5.84 p/ltr. Tax-take with VAT at 15% = 6.72 p/ltr 1.

2) Impact on fuel prices: duty increases represent 42% of the rise in petrol prices from last PBR. Without the fuel duty increases, diesel would cost 4.5p less.

3) Impact on costs of one car: petrol – an extra £87.43 a year, diesel – an extra £69.48.

4) Impact on a two-car family – an extra £174.86 a year (average increase in Band D council tax 2009/10 = £41).

5) On 1 January 2010, VAT will return to 17.5%.