The Budget 2017: what does it mean for drivers?

The Budget 2017: what does it mean for drivers?
Chancellor Philip Hammond delivered his first Budget statement to the House of Commons as he bids to “build the foundations of a stronger, fairer, more global Britain.”

Amid some headline messages – upgraded GDP growth forecast for 2017 and an extra £2bn investment in social care – some important announcements for motorists were made.

Here we take a look inm ore detail at how the 2017 budget affects motorists.

Tackling urban congestion

A boost for the easing of both urban congestion and air pollution, there was also a new pot of £690 million made available for English councils to bid for.

Further details on the funding mechanisms will be announced in due course but councils may face bidding for cash to improve local town centres.

Allocating transport spending of £90 million for the North and £23 million for the Midlands was announced in a bid to address notorious pinch points on the UK’s roads.

RAC chief engineer David Bizley commented: “We welcome more funds to tackle urban congestion – not least because congestion goes hand-in-hand with poor air quality, so tackling one can help the other.

"However, we’ll need to look carefully at how councils will be expected to bid for money.

"What we certainly don’t want to see is a situation where local authorities have to take part in an expensive, protracted process simply to have the funds they need to sort out well known bottlenecks on our town and city centre roads.”

READ MORE: UK is third most congested country in Europe

Tax changes for diesel drivers?

A notable absentee from Mr Hammond’s speech was any mention of a diesel scrappage scheme – the hotly-rumoured initiative of choice for tackling the UK’s air pollution problem perpetuated by its worst offending cars.

Instead, the Budget document hinted at the consideration of a new “tax treatment for diesel vehicles”, that could potentially be unveiled in full in the Autumn Statement, meaning owners of diesel vehicles will learn what the Government has planned by the end of the year.

David Bizley said the Chancellor had “fired a warning shot to diesel drivers”, despite the vaugety of the suggestion over a new tax regime. “This uncertainty is bound to be of concern to private and business motorists alike, who will be wanting urgent clarity on just what the Government plan to do,” he said.

“The RAC will take a leading role in representing motorists when the consultation goes live.”

Fuel duty freeze

As expected, Mr Hammond confirmed the freeze on fuel duty in the UK remains in force for a seventh successive year at 57.95p.

The freeze saves car drivers roughly £130, and van drivers £350 a year, at a cost of £850 million to the Treasury.

Vehicle Excise Duty (VED) for cars, vans and motorcycles will increase by the RPI measure of inflation from April 1 for all vehicles registered before 1st April 2017 – although VED rates for hauliers and HGV road users will be frozen for another year.

New cars registered from April 2017 will fall under the new VED regime which will go ahead as scheduled.

IN OTHER NEWS: Filling up still £11 more expensive than last year

Insurance Premium Tax

There were no further rises announced in the Spring Budget, however motorists can still expect a sting in their premiums as the standard rate of IPT rises to 12% in June this year, as announced in the Autumn Statement last year.

Road maintenance

While comfort can be drawn from the congestion funding, the Chancellor did little to ease motorists’ long-held fears over the current state of our roads, with no funding allocated specifically for preventative measures.

“We’re disappointed that more funding wasn’t announced on preventative road maintenance – this is a missed opportunity given the dire state of many local roads,” David Bizley said.

“The RAC Pothole Index showed that the number of pothole-related breakdowns has doubled in the last ten years, and remain a constant source of frustration for motorists.”

Investment in new technology

Mr Hammond had already announced the ring-fencing of an infrastructure and innovation fund, and in his Budget speech we received more detail.

Key to the motoring sector was the allocation of £270 million for new technologies including driverless vehicles.

Earlier in the week, it was reported that trials are currently underway in East London, where Nissan is undertaking the first test of self-driving cars by a major manufacturer on public roads in the UK.

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Copyright Press Association 2017. Motoring News articles do not reflect the RAC's views unless clearly stated.