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Fuel Duty Remains Frozen as Budget 2016 Is Announced

The amount of tax that drivers pay on petrol and diesel is not going to increase this year...

While this may sound like a magnanimous gesture, last year the amount of money taken in by the government thanks to fuel duty alone was £27.4 billion. And three-quarters of the cost of a litre of diesel is tax, which represents a decade-long high, according to Auto Express.
The Budget was not all good news for car owners, as the anticipated rise to insurance premium tax (IPT) was enacted. It now sits at 9.5 per cent, up from six per cent as defined in last year’s Budget.
The good news is that this amount will only creep up by half a percentage point by the time the next Budget rolls around. And the money raised by this year’s rise is expected to be put into the building of more resilient defences against flooding, following on from the serious damage caused by high rainfall levels over the course of the winter months.
For motorists this will mean that the cost of insuring a car will probably increase. And experts also warn that breakdown cover could also be impacted as providers seek to pass on the extra costs they are facing to customers.
In terms of car ownership as a whole, these increases should not be too great, but the £75 that families will be saving thanks to the frozen fuel duty could quickly be eaten into by insurance premium rises.
The UK’s road networks will be getting some attention following the Budget, with the government allocating cash to push forward projects in the north of England, including a tunnel to speed up journey times between Manchester and Sheffield. Enlargements to the M62 and improvements to the A66 and A69 are also on the cards, while the cost of crossing the Severn to get into Wales is also going to be reduced by 50 per cent over the course of the next two years.
Furthermore, the testing of driverless cars on UK roads has been approved, paving the way for the arrival of commercially available autonomous vehicles nationwide. The government is hoping to position the UK as a world leader in self-driving technology and will be spending £15 million to create the necessary infrastructure for wireless connectivity to be available to vehicles travelling between London and Dover.
Autonomous vehicles are likely to rely not only on their on-board sensors but also on the availability of network access while they are on the move. And so the motorways of the future will need some form of coverage to facilitate this, which will invariably require more investment from government over the coming years.
Industry reaction to the impact of the 2016 Budget was understandably mixed, with some welcoming the ongoing freeze to fuel duty while insurers were less than happy with the rise to the IPT. The promise of driverless cars becoming a mainstay of UK motoring prompted positive responses from many, since their arrival could lead to fewer accidents and less congestion.

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