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13/07/2010
Cover tax could hit policyholders
Experts are predicting that car insurance quotes could be an unexpected casualty when drastic cuts are announced in George Osbourne's emergency budget on Tuesday.
Over the weekend, Osbourne told Andrew Marr, "No incoming chancellor has ever faced a set of public finances like this. And unless we take the determined and concerted action to deal with that then I am afraid we will find our country on the road to ruin."
And it seems that Osbourne's efforts to avoid the "road to ruin" may well result in a significant increase in the average price of a car insurance quote.
As it stands, there is a 5% tax on all personal insurance policies, and the consensus among economists is that this tax will double, which will help the government raise an extra £2 billion.
A spokesperson from car insurance quote specialist Duck2Water, which specialises in finding cheap cover for drivers, comments, "Already there has been a 22.5% rise in the cost of motor insurance cover over the past financial year, so any added tax on policies has the potential to really affect drivers' pockets."
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