Autumn Statement

Economic recovery fails to register with drivers

Economic recovery fails to register with drivers

Economic recovery fails to register with drivers

High petrol and diesel prices continue to force three out of five drivers to cut back on car use, other spending or both to compensate – scant sign of economic recovery for consumers on four wheels, the AA reveals in the lead-up to the Autumn Statement

An AA-Populus survey of 21,587 AA members a fortnight ago found that 45% are using their car less and 28% are slashing family or personal budgets to compensate.

The lack of fuel pump optimism was rammed home with the latest ONS Retail Sales figures for the automotive fuel sector showing that, despite “the largest fall in the price of goods sold in this sector since September 2009”, October’s year-on-year volume of sales was down 2.4%. The next biggest fall was 0.4% in the clothing and footwear sector *.

Chancellor’s Autumn Statement – AA response

Cancelling fuel duty next year tells drivers that the Government is trying to help offset some of the impact of highly volatile pump prices over the past two years. At the pump, a 2p-a-litre increase would have been equivalent to a £1 a tank increase for small cars and £1.40 for Mondeo family.

Pump prices that have shot up 8p to 10p a litre on occasions during 2012 and 2013 have sapped drivers ability to get by: up to 76% of AA members have had to cut back on car use, other spending in the family budget or both. Let’s now hope that the players in the oil and fuel markets don’t cancel out the Chancellor’s generosity.

The car tax disk is now technically redundant with real-time online records available to the police and other agencies.  In AA – Populus polling in January 46% supported abolishing the tax disc and 28% opposed this, with a quarter undecided.  The tax disc has been with us a long time and it will take some getting used to as drivers may well like displaying the fact they have paid, shaming others whose discs are out of date or not there at all.

However, reducing bureaucracy, improving efficiency and security will save money that can be better spent on improving other DVLA services.  The AA will examine the proposals and ensure drivers still have some form of receipt other than a tax disc.  We also warmly welcome the idea of allowing monthly payments for Car Tax – this will help ease the burden of annual fixed motoring costs which for some often come all at once.

(5 December 2013)

Who's cutting back?

Semi or unskilled worker and pensioner budgets are cutting back most on motoring, with 53% using their cars less. Skilled worker families are hacking deepest into other areas of their spending to afford fuel and stay on the road – the 35% affected compares with 22% in the professional and higher-level manager group. Even so, 42% of the better-off AA members are using their cars less.

Regional/National

Drivers with the gloomiest outlook on pump prices are in Wales where 67% are spending less or driving less because of fuel costs. Every other AA member in Northern Ireland (50%) is using the car less, providing the bulk of the 65% affected by fuel prices. Lower mileages and cheaper fuel should leave Londoners best insulated against pump price volatility, yet 41% have reduced car use and 20% are make savings elsewhere to stay mobile.

We were stunned when, despite a significant supermarket price war and big fuel price drop, UK petrol consumption in October failed to recover

Edmund King, president of the AA

Weather wasn’t a factor

“We were stunned when, despite a significant supermarket price war and big fuel price drop, UK petrol consumption in October failed to recover. Weather wasn’t a factor and the Grangemouth dispute didn’t create panic buying. However, power companies were announcing severe price hikes and consumer sensitivity to all forms of energy price hikes appears to have been exposed - like the raw nerve of an unrelenting toothache,” says Edmund King, the AA’s president.

“Searching for answers, we found that our members in Wales, Northern Ireland and other rural areas often continue to pay 5p a litre more for supermarket petrol (barely challenged by other local retailers) than down the road in other towns with real competition. In Market Drayton, a town of 12,000 people, supermarket petrol was 6p a litre or £3 a small tank dearer than in bigger towns.

“The Government has committed to a fuel duty freeze and is trying to extend the 5p rural fuel duty rebate, which is helpful. However, if the Treasury is going to make concessions to the fuel retail industry, it needs to tie them to fairer pricing. That can be achieved via wholesale price transparency. Despite falls in the average price, inflated prices on some forecourts mean lower sales hence fewer customers.”


(3 December 2013)

* ONS Retail Sales: Sector Summary, October 2013

 

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