The Budget had implications for many people around the UK, but the effect on motorists has been underreported.
In this blog, we’ll discuss what The Budget means for road users, from vehicle tax to fuel duty, road improvements, and more.
The Budget and Fuel Duty
Many experts predicted fuel duty would increase under Labour, but the Chancellor, Rachel Reeves, announced that it will remain frozen until Spring 2025, much to the delight of drivers watching their wallets.
This means that the 5p fuel duty cut the Conservatives introduced will be extended by one year. The goal is to help combat the costs of living and global uncertainty, according to Reeves, who declared that “there’ll be no higher taxes at petrol pumps.”
A pledge to improve British roads
If you’ve ever had the pleasure of driving in Britain, you’ll know that many roads are in a state of disrepair. We can’t keep count of the number of potholes near our offices here in Billingham, Teesside, and we’re sure others are in similar situations across the country.
To combat this and give motorists something to shout about, Reeves announced that an extra £500 million will be made available to improve UK roads. This translates to roughly one million potholes repaired, which meets Labour's manifesto pledges and is a big win for drivers.
Vehicle tax changes
In not-so-good news for motorists, Labour announced a series of tax hikes for new drivers of non-electric vehicles, which includes hybrid vehicles. Taking effect from April 2025, first-year Vehicle Excise Duty will double for those who buy non-electric vehicles. The goal is to raise £400m for treasure funds within a year and £1.7bn over a decade and to incentivise people to buy electric vehicles instead of combustion engine cars.
The amount you pay will depend on how much CO2 your vehicle emits. For example, a Range Rover may be charged as much as £5,490 annually compared to £2,745 previously for their first year on the road.
However, somewhat paradoxically, fully electric vehicle owners will now pay the standard rate of VED like everybody else, with a £10 annual charge levied in their first year on the roads.
Some experts argue that these plans don’t go far enough, however, and that VAT should be equalised for home and on-street EV charging. More than 40% of EV owners don’t have off-street parking and charging available, and as a result, it’ll remain expensive to own and run one of these vehicles.
So, plenty of people have called for additional measures to be introduced to encourage more people to buy EVs over combustion engine alternatives.
Fuel price changes
PumpWatch (also known as Fuel Finder) is a scheme that’s long been touted by economists, but it’ll finally be introduced by the end of 2025.
For those who don’t know, PumpWatch is a monitoring scheme that requires fuel manufacturers to publish real-time fuel prices. The scheme should mean better, more accurate monitoring of fuel prices which will encourage more competition and reduce costs at the pump. It’ll also enable drivers to find the cheapest fuel in their area and the savings of wholesale fuel prices will be passed onto drivers directly.
To get into the specifics, prices must be shared within 30 minutes of being changed, and the data will be available in navigation apps like Google Maps, in-car devices, and comparison websites.
Conclusion
The Budget has been a popular one for working people across the UK and drivers are largely positively affected by the new measures. However, the situation regarding EVs is not enough, according to many experts, and more could be done to incentivise more EV purchases in the UK.
