The AA welcomed news that the fuel duty increase due in April 2010 has not been brought forward, and backs incentives for electric cars.
However, the increase in VAT will hit drivers at the pumps to give them a bumpy ride in the New Year, The AA says.
Based on current prices, the increase in VAT to 17.5% from January 1st will add 2.36p to a litre of unleaded petrol and 2.4p to a litre of diesel.
This will bring pump prices back to the highs of last autumn and add £61.41 to the annual fuel cost of a family with two petrol cars.
The AA welcomed initiatives to promote low carbon technology, and said it supports plans to exempt electric vehicles from company car tax for 5 years.
As a maker with aspirations to take the lead in electric vehicles (EVs), Renault was cheered by the Chancellor's announcement.
Renault UK Managing Director, Roland Bouchara, said: "This excellent news will undoubtedly assist in encouraging the British public and business community to adopt zero-emission (ZE) transport.
"We're convinced that our exciting 'Z.E.' range, which is just 18 months away, will capture everyone's imagination."
The Society of Motor Manufacturers and Traders (SMMT) also said it was pleased with the planned investment and support for low carbon technologies.
SMMT chief executive, Paul Everitt said, "2010 is set to be another extremely difficult year for the UK motor industry as increased VAT and first year VED rates directly impact on consumer demand.
"The opportunity is to take advantage of the transition to low carbon vehicles, with new incentives for company car drivers and van buyers, as well as extra resources for collaborative research and development."
Posted on 10.12.2009
