Chancellor George Osborne dominated the motoring news this week. His government's plans to abolish the tax disc after 93 years could cost the Treasury £80 million in lost revenue. However, the DVLA hopes to reduce the number of tax evaders to previous levels and said about 99% of vehicles in Britain are correctly taxed. The RAC interpreted Osborne's silence in his Autumn Statement, regarding fuel duty, as a sign of an increase. The tax accounts for 70% of the price of petrol or diesel. But every cloud has a silver lining, and the Chancellor's plans to ban cash payouts for minor whiplash claims could save motorists up to £50 on their car insurance.
Since the decision to abolish the paper tax disc in October last year, the number of unlicensed vehicles on British roads has doubled, figures from the Driver and Vehicle Licensing Agency (DVLA) reveal.
An estimated 560,000 vehicles are understood to be evading vehicle excise duty (VED), which is costing the government an estimated £80 million in lost revenue. In 2013, 0.6% of vehicles in Britain evaded the tax, costing £35 million.
"These are very worrying and disappointing statistics indeed. Sadly, the concerns we raised about the number of car tax evaders going up at the time the tax disc was confined to history have become a reality," said the RAC's chief engineer David Bizley.
"We really cannot afford for this to increase again, for the sake of both road safety and the country's finances," he added.
Figures from the DVLA show that almost 99% of vehicles on the road are correctly taxed, passing about £6 billion to the Treasury every year. The agency said that 75% of motorists now pay tax online or over the phone. Unlicensed vehicles can be caught on automatic number plate recognition cameras or by police.
The RAC expects fuel duty to rise next year, since Chancellor George Osborne did not mention it in his Autumn Statement. Fuel duty makes up 70% of the total cost of a tank of petrol or diesel.
Only last week, the RAC's chief engineer predicted that petrol prices could drop to below £1 per litre as wholesale prices continue to fall.
"Motorists may be relieved that the Chancellor has not used low fuel prices as an immediate opportunity to raise duty on petrol and diesel to help reduce the deficit," Bizley said. "But by not mentioning fuel duty in his Autumn Statement, the implication is that the 87.95p charged on every litre currently will be subject to inflationary increases in line with RPI from April 2016 onwards."
The Chancellor revealed some more changes in the Autumn Statement, affecting motorists across the country. His plans to ban cash payouts for minor injuries were welcomed by motoring groups.
Osbourne told MPs that the move could save the insurance industry over £1 billion, sharply reducing fraudulent injury claims, resulting in up to £50 in savings per motor insurance policy.
"This is a significant breakthrough in tackling the compensation culture and is good news for motorists," Huw Evans, the director general of the Association of British Insurers, told the Daily Telegraph.
Most British drivers are in favour of raising the driving age from 17 to 18, with 76% supporting the introduction of probationary licenses for young drives.
Figures from a survey from dashboard camera maker SmartWitness, show that drivers aged 17 to 19 cause 12.5% of all serious accidents, where someone is hurt or killed. However, the age group only makes up 1.5% of all drivers in Britain.
It is estimated that graduated licenses for young drivers could save almost 4,500 lives per year
© M2 Bespoke 2015