How Budget 2016 affects UK motorists


UK motorists will be affected by a small increase in car insurance bills after the Chancellor announced a rise in insurance tax premiums in today’s Budget – but their fuel bills won’t increase just yet.

Petrol and diesel duty will remain frozen for the sixth year on the trot, saving the average driver £75 a year compared with the pre-2010 fuel duty escalator set up by the previous administration, according to George Osborne. Pump prices are at the lowest they’ve been for years.

Reactions to the 2016 Budget

Quentin Willson, broadcaster and member of FairFuelUK

‘Freezing duty for a sixth year is hugely significant. The Treasury now has five years of evidence to prove that keeping fuel duty low has helped improve GDP, stimulate economic activity and actually improve tax receipts. The Chancellor knows that low transport costs have had an enormous economic benefit to the UK over the last five years.’

Mike Hawes, chief executive of industry body the SMMT

‘The 2016 Budget contained some positive measures and we were pleased to see the Chancellor recognise SMMT’s call for greater support for energy efficient technologies, through both the extension of Climate Change Agreements and a forthcoming consultation on the future Company Car Tax treatment of ultra low emission vehicles. However, we were disappointed that the Chancellor has not done more on business rate reform. The removal of plant and machinery from business rates valuation would have encouraged investment in innovative manufacturing technologies, improving still further UK automotive industry productivity and safeguarding our competitiveness.’

James Hookham, managing director of policy, Freight Transport Association

‘A further freeze of duties is welcome but the Chancellor missed a chance to give a boost to the stuttering economy by reducing the tax on an essential business input.’


Motoring organisation the RAC had pointed out that the Government already takes a whopping 73% of the price of each litre of fuel in tax… so it wouldn’t be ethically right to gobble up even more of motorists’ hard-earned every time they filled up.