The "2p or not 2p" Budget

AA says budget brings some temporary relief

12 March 2008

The AA described the Chancellor's decision to defer the threatened 2p per litre increase in fuel duty until October as "temporary relief" which may help to quell "panic at the pumps".

Edmund King, AA president, said; "This temporary relief should quell any panic at the pumps. The Chancellor has listened to us and made a sensible decision. Motorists will be relieved that the '2p or not 2p' budget is 'not 2p', although record pump prices leave little to cheer.

"The proposed increase would have taken fuel prices to new record levels. Two pence might not sound like much but when it is added to the 20 pence per litre increase in pump prices in the last year it could have been the last straw for many motorists and hauliers.

"If fuel prices remain at record levels in the autumn the increase should be scrapped.

"The increase in vehicle excise duty to £400 for Band G vehicles will also catch out many motorists. Drivers want cleaner, greener cars but we must ensure that the proposals in the King Review are not just a green smokescreen for allowing the Treasury or local authorities to take more cash from the motorists.

The AA supports the faster introduction of greener, cleaner vehicles and will study the Julia King proposals on low carbon cars with interest but we are concerned over the confusion on environmental policy with different local authorities doing their own thing."

On transport policy the Chancellor announced new funding to explore road pricing technology as he stated that in the longer term road pricing could reduce congestion.

King added: "Motorists are being hit with road pricing already due to the record price of fuel so perhaps this 'road pricing funding' would be better spent immediately by getting rid of bottlenecks on motorways and main roads."

On review of vehicle excise duty the Chancellor said he would introduce new bands in 2009. In 2010 a new first year rate tax will be introduced for new cars with emissions over 130g CO2. Manufacturers and motorists need advance warning of changes and we must remember that some larger vehicles are essential for bigger families." King said; "Graduating tax according to emissions sends out the right message but we need to examine the detail to ensure that the system is fair. "

Notes to Editors


AA Media Line 01256 493 493
Edmund King 07738 791052

Budget fact file

  • Average UK petrol prices have risen to yet a new record high of 106.32 pence per litre, and diesel 113.12.
  • At the same time last year, the average price of petrol was 89.02 pence per litre, and diesel 92.29.
  • With petrol 17.3 pence per litre more expensive than a year ago, it is now costing £8.65 more to fill up the typical 50-litre fuel tank.
  • For the individual car owner, the monthly cost of petrol is £18.54 higher than a year ago.
  • Across the UK, consumer spending power is being drained £11,481,066 per day by the extra cost of petrol compared to last year.
  • The £5 petrol gallon has arrived on UK motorways with the M40 Cherwell Valley Service Area charging £110.9 for petrol and 116.9 for diesel.
  • The difference between the price of petrol and diesel has reached a new record, with diesel now 6.8 pence per litre more expensive than petrol.

More budget facts in our pre-budget brief


12 March 2008