Summer Budget: Fuel and transport
Freeze on duty and new VED bands
His decision to freeze fuel duty follows pressure from a number of organisations and industry leaders.
Jerry Stewart, director of Eagle Couriers and Fellow of the Institute of Couriers, said: “Firstly we are delighted that George Osborne has seen sense and frozen fuel duty – this will allow firms such as Eagle Couriers to plan for future growth and employment in the sector to grow.
“We would however still like to see a stabilising mechanism in place and believe that businesses and individuals should not expect the huge fluctuations at the pumps which we have come to expect.”
A new Vehicle Excise Duty mechanism will be used to fund road building. By 2017 three-quarters of new cars will not pay VED because of new fuel efficiency technologies. The duty in the first year will be set according to emissions, as it is today, but it will be updated for new technology. Thereafter there will be three duty bands – zero emission, standard and premium.
No new revenue will be raised. as today. For 95% of all cars sold in the UK – the charge will be £140 a year against the current average of £166.