DIFFLOCK.com VISIT OUR ONLINE 4x4 STORE!
4x4 News
Budget 2007 roundup
By Simon Ward-Hastelow
Published: 22nd Mar 2007
Original article: http://www.difflock.com/magazine/4x4_News/Budget_2007_roundup.shtml

Very little to cheer the UK motorist. Very few changes but what does change is going to cost you dear. If the focus was on 'green' issues then why no mention of public transport? why no reduction of tax on green fuels?

  • Fuel duty up 2p per litre from October.
  • Putting VAT on airline tickets ruled out.
  • Road tax on highest-polluting vehicles up to £300 and to £400 from April next year.
  • The least-polluting vehicles to have their duty cut to £35.

Here are some comments from other motoring and transport commentators:

CAP: ‘Gas guzzler’ budget penalties will not lead to used 4x4 prices meltdown

AS 4x4 DRIVERS braced themselves for Gordon Brown’s anticipated ‘anti gas guzzler’ budget, CAP revealed they are already suffering worse depreciation than owners of most other car types.

According to CAP, publishers of the industry standard Black Book used car price guide, the first quarter of 2007 saw 4x4s and other large luxury cars bucking a generally rising market trend and decreasing in value compared with the same period last year.

While secondhand prices in the overall market have been generally rising year on year in comparison to the first quarter of 2006, the first three months of this year have seen 4x4s typically worth an average 9.1 per cent less than they were a year ago.

The performance of 4x4s in the used market at three years old has prompted many claims that it is being driven by increasing fuel costs and other factors such as congestion charging.

Experts at CAP, however, argue that higher running costs are playing a relatively minor role in weakening used values for 4x4s and point instead to the simple mechanics of supply and demand.

The transformation of the 4x4 from a workhorse into a lifestyle vehicle in recent years has led to major growth in volume. This is demonstrated by the 150 per cent per cent increase in the number of models available new over the past three years. In 1998 there were 282 4x4 models available new – a figure which has grown to more than 700 today.

CAP Forecast Manager for passenger cars, Jeff Knight, said: “As volume increases, used values inevitably adjust downward as the old image of exclusivity is eroded and increased choice makes competition to sell used examples more fierce.

“Although this budget is likely to provoke speculation about 4x4 values meltdown, an increase to £300 in the Road Fund License, rising to £400 next year, is a small sum for those who are prepared to pay a retail price of, for example, around £26,500 for a three year old BMW X5. “

Knight does, however, predict that older vehicles will be affected by the increase. He added: “People who aspire to the 4x4 lifestyle statement and are on the borderline of affording an older example are likely to think twice about incurring a Road Fund License charge of £400 for cars emitting 225 or more g/km of CO2 from April next year.

“The rest of the target market for large off-roaders are highly unlikely to force prices down by steering clear of higher Road Fund License costs unless it is increased by a much higher proportion than Gordon Brown has announced.”

The Retail Motor Industry Federation (RMIF) comments on today’s budget:

CHANCELLOR SQUEEZES MOTORIST, BUT FAILS TO INVEST IN TRANSPORT

‘The Chancellor has attacked the motorist with the increase in Vehicle Excise Duty (VED) for 4x4s and other large vehicles, but has failed to offset this by any extra investment in transport. There are more effective ways to influence the buying habits of motorists than the “blunt instrument” approach of a road tax increase. Instead of punishing motorists for choosing what is available, the Government should be doing much more to encourage vehicle manufacturers to develop hybrid vehicles. Consumers need to be given a proper choice, and manufacturers and vehicle dealers need to be able to give it to them.’

‘The Chancellor is using road tax as a weapon against motorists, and it will be those who really need 4x4s for their daily lives that suffer most.  Families, rural dwellers, farmers, and business users are less able to absorb this further increase, as they are already paying extra to use their vehicles through fuel duty, company car tax, and other measures.’

FUEL DUTY INCREASE-MOTORIST PAYS PRICE FOR CHANCELLOR’S GENEROSITY

‘The two pence per litre increase in fuel duty scheduled for October 2007 is a revenue-raising exercise with no benefit for the motorist, who will be paying for other Government programmes. In fact, it will be the motorist who pays for the Chancellor’s apparent generosity.’

BIOFUELS – MISSED OPPORTUNITY
‘The Chancellor has ignored the opportunity to generate market demand for biofuel.  He seems to expect industry and the consumer to do all the work to get biofuel going, without the much-needed tax inducements or Government support.

‘The current system does not benefit the motorist at all. Biofuel is limited to five per cent per litre, which works out at one pence per litre. This is offset by bio-production costs. The Chancellor says the motorist is saving 20 pence, but in reality it is one pence.

‘The Chancellor has missed a real opportunity to encourage motorists to choose cleaner vehicles. Indeed, the Chancellor’s already-announced proposal to change the MOT test intervals will negate any positive effect of the measures. If this proposal is adopted, emissions control on the older vehicles which make up the majority of the car parc will be lost. As a result any carbon savings will be rendered moot.’

CORPORATION TAX – CHANCELLOR GIVES WITH ONE HAND, TAKES WITH THE OTHER

‘The decrease in the higher rate Corporation Tax is a good incentive for larger businesses, and should have major benefits. They will be able to keep hold of more of their profits, which can be reinvested. After many years of increasing taxation on business, this is a welcome relief.

‘However the increase in the Small Business Rate is going to be a blow for smaller businesses who have felt the impact of increasing tax and red tape more so than larger businesses.’



© DIFFLOCK.com | info@difflock.com | www.difflock.com