November 28, 2016 at 8:09 PM
Philip Hammond delivered his first Autumn Statement as Chancellor of the exchequer. His plan brings a mix of good news and bad news for the average motorist. Though some say the plan is pessimistic in predicting the economic effects of Brexit, the plan also includes looking to the future with optimism regarding the motoring industry in the UK. The Autumn Statement highlights some plans for investing in roadways and new motoring technology.
Motoring topics discussed as part of the Autumn Statement include fuel tax, car insurance premiums, fraudulent whiplash claims, public transportation, and road maintenance. The Chancellor also proposes to encourage motorists to choose more eco-friendly cars by increasing the number of charging stations for electric vehicles (EV). The Autumn Statement includes investing in autonomous cars.
AUTUMN STATEMENT AND CAR INSURANCE
The insurance premium tax (IPT) will be raised for the third time in two years. The tax will increase from 10% to 12% in June 2017. (1) This rise in insurance costs may be balanced with an eventual decrease in insurance rates. The decrease is expected to occur as a result of cracking down on rampant false claims of whiplash. The government vows to stop the fraudulent claims by requiring more checks before a claim can be filed.
Ending the insurance fraud should save consumers about £40 a year in lower insurance rates. (2) However, these savings will not be immediate. They will only begin once the crackdown has successfully stopped the fraud. This will allow the insurance companies to pass on these savings to the motorists.
The existing hold on the fuel duty will be extended for another year. This means the fuel duty will remain at its current rate of 57.95p a litre for the 7th year. Chancellor Hammond said that to hold the fuel tax steady at the same rate will cost the UK estimated £850 million in revenue for 2017. The measure is said to show that the average motoring consumer is deeply valued for their part in the future of the economy.(3) With the fuel tax held at its current rate, the average driver will save £130 a year.(4)
TRAFFIC AND PUBLIC TRANSPORTATION
Drivers in the UK may be all too familiar with traffic issues such as increased traffic from bottlenecks in key roads. The Autumn Statement addresses this problem. A sum of £220 million is intended to correct the pinch points of heavily traveled roads. In addition to solving these traffic problems with road improvements, public transportation is also being supported. Hammond has allocated £1.1 billion to improvements in public transport networks in England and local roads.
INVESTING IN MOTORING TECHNOLOGY
With the Autumn Statement, the Chancellor took measures to encourage the use of low-emissions vehicles. An £80 million investment in the future of motoring has been allocated to increase the number of EV chargers. The increased availability of the chargers is necessary to promote the use of low-emissions vehicles. The Autumn Statement institutes a 100% of the first year capital allowance on the installation of a new EV charging point. This means that a company that installs an EV charging point can deduct the full price of installation from the profits for the first year before tax.(4)
The UK is poised to be a global leader in the development of the autonomous car. The Chancellor allocated £100 million to go towards the development and testing of autonomous vehicles. By funding automotive innovation, Hammond hopes to give a boost to the automotive and engineering industries. An amount of £150 million has been set to support low-emission taxis and buses.
During his Autumn Statement, the Chancellor said that in light of the decision to leave the European Union (EU), the focus is on improving infrastructure and innovation.(2) Chancellor Hammond said that this Autumn Statement would be his last. Next year, he will be releasing an autumn budget instead. A Spring Statement will be added in 2018. These alterations will allow financial changes to be put in place well before the beginning of the fiscal year.
The changes set forth by Hammond include many improvements for motorists. The road improvements including pothole repairs can save motorists money since potholes cost motorists about £370 million automobile repairs every year.(2) Motorists also will save money at the fuel pump. The proposed changes to road infrastructure to address the most heavily congested bottlenecks will be a welcome improvement for many motorists.
1 Torney, Chris. "What The Autumn Statement Means For Motorists". Confused.com. N. p., 2016. Web. 28 Nov. 2016
2 "Autumn Statement 2016: What Does It Mean For Drivers?". What Car?. N. p., 2016. Web. 28 Nov. 2016.
3 Sheehan, S. "Autumn Statement 2016: How It'll Affect Motorists | Autocar". Autocar.co.uk. N. p., 2016. Web. 28 Nov. 2016.
4 "Autumn Statement 2016: Significant Investments In Motoring Announced". Carbuyer. N. p., 2016. Web. 28 Nov. 2016.