Chancellor of the Exchequer, Jeremy Hunt, has announced an extension to the fuel duty cut in the Spring Budget, but industry leaders say the measures don’t do enough to help motorists or promote electric cars.
Headlines from the Spring Budget included a cut to workers’ National Insurance, as well as a freeze to alcohol duty and increased support for working parents, with limited measures introduced for motorists.
The Chancellor did, however, confirm that he would extend the 5p cut to fuel duty per litre of petrol or diesel. First introduced in March 2022 amid soaring fuel prices, Hunt has now announced this will be extended for another 12 months. It avoids the previously planned inflation-linked rise.
The Chancellor said: ‘If I did nothing, fuel duty would increase by 13 per cent this month. I have decided to maintain a 5p cut and freeze fuel duty for another 12 months. This will save the average car driver £50 next year and bring total savings since the cut was introduced to £250.’
However, the Budget has angered the UK’s automotive sector, which says that it is not doing enough to promote electric cars and increase their uptake.
The government introduced the Zero Emissions Vehicle (ZEV) mandate in 2024, requiring a certain percentage of all volume manufacturer’s new sales to be electric. This is 22% in 2024, but will increase each year until all new car and van sales have be fully zero emissions by 2035, and firms will face fines if they’re unable to meet the required targets.
The boss of Vauxhall has called out the government for doing ‘nothing’ to help private buyers make the switch to EV.
James Taylor, managing director of Vauxhall, said: ‘Today’s Spring Budget has not delivered the acceleration needed to stop the UK’s transition to electric vehicles from stalling.
‘If we are to meet the rightly ambitious targets laid out in the Government’s Zero Emission Vehicle mandate, then there needs to be incentives for private car buyers to make the switch to electric as there are in the majority of European nations.
‘While there are strong incentives for company car drivers to make the switch to electric – including for those choosing luxury vehicles – the private buyer who wants a more attainable small or family car receives nothing.’
The government has previously announced that from April 2024, car tax rates will go up in-line with the Retail Price Index. It won’t affect vehicles that are currently free to tax electric models and those registered before April 2017 that emit less than 100g/km CO2 – but for other vehicles will increase by around 6%, equating to an increase of around £5 to £10 for most vehicles. Those vehicles currently free to tax will have to pay from April 2025, however, as was announced in the 2022 Autumn Statement.
