The Emergency Budget as it happened

The Chancellor, George Osborne, delivers the Emergency Budget today - June 22 2010 - the first Budget from the the new Conservative-led coaltion government. One of the toughest packages of tax increases and spending cuts in modern times is expected to be unveiled, designed to tackle Britain's record deficit of £155 billion.

He has already said that the new Budget will be based on fairness, with the better-off paying more, but how will it affect motorists? We'll bring you up to the minute updates on the issues that will affect you...

12.20pm...

The day before England's crucial final World Cup group match against Slovenia, the Chancellor, George Osborne, will shortly his Budget speech - undoubtedly the most important budget for a generation.

12.30pm...

There's standing room only in the House of Commons as George Osborne gets set to deliver his Budget announcement, six weeks after the election campaign. It's one of the most long-awaited Budgets in many years.

12.33pm...

The Chancellor starts his speech. The big expectation is that he will increase VAT and he says he will not hide hard choices from the British people.

12.44pm...

It's been labelled the 'unavoidable budget' but the bulk of the deficit reduction is to come from lower spending rather than higher taxes.

1.14pm...

From the 4th of January next year, VAT will rise from 17.5% to 20%. The announcement has caused consternation in the House of Commons.

Company car tax is also set to be reformed next year to encourage company car drivers to choose cleaner cars.

1.17pm...

There will be no extra duty added to fuel as the Government looks to stabilise fuel prices at the pumps by examining the fluctuating price of oil. This is part of its Fair Fuel Stabiliser, which it's still examining options for, while under plans the Government has inherited, fuel duty is scheduled to rise by 1p per litre above indexation in April 2014.

However, this still means a 1p rise in fuel prices in October 2010 and a further 0.76p rise on 1 January 2011, just three days before the increased VAT rate will come into force. 

The Government is considering the case for introducing a fuel duty discount in remote rural areas. This includes a possible pilot schemes in Scotland.

Some good news is that car tax rates look to have remain unchanged.

Find out how much your new car costs to tax, by clicking here

The Chancellor did not reveal how the Government plans to cut £683m from the Department for Transport's budget. That is set to come from the scrapping of road improvement schemes.

1.23pm...

In line with the increase in the VAT rate, a higher rate of Insurance Premium Tax (IPT) will increase on January 4 2011 with the standard rate increasing from 5
per cent to 6 per cent, meaning an increase in annual car insurance renewal rates.