Riders of motorcycles over 600cc have been hit with a 3% rise in road tax from today after Chancellor Alistair Darling gave his first Budget this afternoon.
The annual vehicle excise duty (VED) for motorcycles with an engine size in excess of 600cc will rise from £64 to £66 (£36.30 six-monthly) as the Chancellor looks to clamp down on higher emissions vehicles and promote greener modes of transport.
But the government have held-off a proposed increase 2p-per-litre in fuel duty for six months amid growing concerns over fuel and energy prices.
VED in the lowest tax bracket, 150cc or lower, remains the same at £15 for an annual licence whilst tax discs in the remaining brackets, 151-400 and 401-600 will cost £33 and £48 respectively for 12 months.
Drivers of the most polluting cars have borne the brunt of the 2008 Budget, with plans to introduce new tax bands for vehicles emitting more than 255g/km of carbon dioxide and a £950 “showroom tax” being applied to so-called “gas guzzlers” in an attempt to persuade motorists into more environmentally-friendly models.
The Chancellor announced new funding to explore road pricing technology as he stated that in the longer term road pricing could reduce congestion.
But the changes failed to impress motorist groups, with the AA branding the decision to defer the fuel duty increase as a “temporary measure” whilst claiming that the government could be doing more to cut congestion and lower vehicle emissions.
“This temporary relief should quell any panic at the pumps,” said AA President Edmund King.
“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.”
On the issue of road pricing, 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.”