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The Pre-Budget Report has a major impact on the country and drivers will be left feeling the effects as much as anyone. This year it seems to be a case of some good and a bit of bad news for drivers courtesy of the Chancellors' report.
The most immediate change from Alistair Darling's report is a reduction in VAT which has been cut to 15% from its original rate of 17.5%. In what are tough times this should be good news for both business and consumers. For drivers it will mean 2.5% less to pay on a host of motoring related costs including the purchase of new vehicles, fuel costs and maintenance parts.
Unfortunately, while the drop in VAT comes as good news, to accommodate it something else had to give. The result is an increase in fuel duty which comes as a blow to drivers at a time when the pressure of rising fuel prices was subsiding. The Chancellor argues that the VAT changes will work to bring fuel prices down but the reality of this is yet to be seen.
If nothing else this should give drivers a kick up the backside to reinforce the importance of making your fuel go further; whether that is through better journey planning, using the car less or using efficient driving techniques.
The report was, as you would expect, heavily influenced by the current economic situation, so the announcement to effectively postpone changes to VED bands came as no surprise. A retrospective system was planned which would have been based on a vehicles emissions with higher rates for the most polluting. Crucially this would have included older models and would have affected some 2.3 million motorists at a time when money is tight. Drivers often run older cars because they can't afford to purchase more efficient alternatives so this move could have left many drivers in a financial fix.
In addition, the Chancellor announced that £3bn of capital spending is to be brought forward, which includes additional motorway building projects. Hopefully this will go some way to reducing congestion and making it easier for drivers to get from A to B.
So a mixed report for motorists who will welcome the fall in VAT and the revision to VED banding. While on the other hand the rise in fuel duty will come as an unwelcome surprise, so as ever drivers must carefully manage their fuel use and drive as efficiently as possible to negate this impact.
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