Money to be set aside for infrastructure but it is not all good news for drivers
PUBLISHED: 09:27 09 July 2015 | UPDATED: 09:53 09 July 2015
The chancellor announced measures to create new bands of vehicle excise duty to help fund investment in the country’s road network in his budget.
George Osborne said every penny of vehicle excise duty (VED) would go towards a new roads fund in what he described as “a major reform to improve the infrastructure and productivity of our economy and deliver a fairer tax system”.
Alongside the changes to VED it was revealed fuel duty will remain frozen for the rest of the year. However no promises were made beyond that.
There has also been a 9.5pc increase on insurance premium tax which will effect all drivers.
The new VED banding system will come in to effect for cars registered on or after April 1, 2017.
First year rates will vary according to the carbon dioxide emissions of the vehicle, and there will be a flat standard rate of £140 for all cars except those emitting zero grams of carbon dioxide per kilometre, for which the standard rate will be £0.
Cars with a list price above £40,000 will attract a supplement of £310 per year for the first five years in which the standard rate is paid.
Mid Norfolk MP George Freeman greeted the news of the Roads Fund which he said was great news for the A47.
He said: “The new Roads Fund announced today is great news for the A47 to secure the infrastructure investment we need to promote Norfolk’s ‘Innovation Corridor’, helping businesses, entrepreneurs and residents in our area, with a major boost to the local economy.”
However, Edmund King, AA president, said drivers should not be “dancing in the streets or at the pumps due to a promised freeze in fuel duty”.
He said: “The sting is in the tail. The Insurance Premium Tax increase on the average car insurance policy is still equivalent to a fuel duty increase of almost 2p per litre.
“Either way drivers are being hit in their pockets. These are outrageous hikes in tax which could well backfire.”
The region’s rail network was also covered by the chancellor.
The government has pledged £4.2bn to travel infrastructure in the East including backing schemes to get to London by train in 90 minutes from Norwich and 60 from Ipswich.
The Conservatives had already pledged to carry out a raft of works along the A47 and the Lowestoft Third River Crossing.
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