How the spending review affects motorists

Chancellor George Osborne announced a raft of measures that will affect motorists during his autumn spending review, headlined by a 37% cut to the Department for Transport’s budget.

The cuts will come from the DfT’s daily running costs. However, the Department’s capital spending will increase by 50% to £61 billion. £5 billion of that is allocated to road maintenance, including £250 million over the next five years for a ‘national pothole fund’.

Osborne described the increased spending as “the largest road investment programme since the 1970s.” In the last Budget, the government announced a number of large-scale road improvement schemes and the creation of European-style A-road ‘expressways’ has been mooted. But a direct link between those plans and the extra money wasn’t drawn.

£600 million was also pledged to help uptake and manufacturing of ultra-low emissions vehicles (electric and hybrid) over the next five years, but no clarification was given on the £5,000 grant given towards the purchase of new plug-in vehicles, which is due to expire in 2016.

No immediate changes to Vehicle Excise Duty were announced, however the three per cent supplement levied on diesel company cars will now remain in place until 2021, “in light of the slower-than-expected introduction of more rigorous EU emissions testing.” A number of MPs recently called on the government to change the VED system to take account of harmful nitrogen oxide emissions and introduce a diesel scrappage scheme, to encourage drivers to switch less polluting vehicles.

Motorists are set to save £40-£50 per year on their insurance premiums, as changes are implemented to the way motoring-related injury claims are handled, in particular the removal of the right to damages for minor soft tissue injuries such as whiplash. The insurance industry as a whole is expected to save £1 billion a year as a result, which Osborne said should be “passed on” to motorists.

Fuel will remain unchanged until March 2016.

In addition, £250 million will be spent on a new lorry park in Kent for use during Channel crossing disruption, bringing an end to Operation Stack on the M20, which usually causes chaos on other routes in the county.

Support for the wider UK motor industry will continue, a move welcomed by the Society of Motor Manufacturers and Traders. In a statement, the SMMT said: “Government engagement with industry has been fundamental to the recent success and global competitiveness of UK automotive, so today’s commitment by the Chancellor to a long-term industrial strategy for the sector is encouraging.”

By Only Motors

What do you think?


Leave a Reply



Top Gear on air at Christmas

Top Gear on air at Christmas

This is the Volvo XC90 R-Design