The Spring Budget is just a week away and drivers are eagerly anticipating what measures will be introduced to help them with their stretched finances which has already forced some motorists to ditch their cars.
For once, the Government has remained relatively mute on what it plans to roll out, especially on issues affecting Britain’s motorists, despite millions calling out for new changes.
In the 2023 Spring Statement, the Government pledged over £5billion to maintain fuel duty at its current level for 12 months, notably a five pence per litre cut, saving drivers around £100 a year.
The extension was welcomed by drivers, especially after forecasts suggested the Treasury would raise the rate of fuel duty by as much as 23 per cent. This would have sent prices spiralling, potentially beyond the record-breaking levels of June and July last year.
Drivers will be hoping for help during the Budget next week
GETTY
Three options are available to the Government. Hunt could stand at the lectern and avoid any mention of the fuel duty freeze and allow it to expire later in March.
This would likely prompt a wave of discontent from drivers across the UK, especially as petrol and diesel prices begin to slowly rise. It comes at a time when the Government is already trying to reduce fuel costs through a new service for retailers to report any changes to prices.
Hunt could announce a second extension to the cut and keep things how they are. This would likely cost the Government around £5billion, as it has the past two years, which could raise further questions as it gears up to cut taxes.
The third option would see the announcement of an extension to the cut at a higher rate. Potentially seven or even 10 pence off per litre of fuel, helping to bring costs down significantly and allow drivers to make overdue savings.
Jeremy Hunt will deliver the Budget on March 6
PA
Howard Cox, fuel price campaigner and London Mayoral candidate for Reform UK, recently delivered a petition to No 10 with more than 125,000 signatures demanding that the Government extend the fuel duty freeze or slashes the rate beyond five pence per litre.
Car insurance has been another bugbear for motorists with the majority of Britons seeing a staggering increase in the amount they’re paying for their coverage.
While numbers vary across insurance providers, estimates show that the average driver could be paying around £1,000, while younger drivers are being priced out of cars with quotes as much as £3,000.
While there is little the Government can do to force insurers to lower prices, it can introduce a cut to the rate of Insurance Premium Tax (IPT), a measure that has been backed by the Association of British Insurers and the British Insurance Brokers’ Association.
There is appetite for such tax cuts and could help drivers save around £70 on their insurance. While this will not appease people who have seen their premiums jump £200 almost overnight without any changes, it will not be rejected by hard-pressed Britons.
Even electric vehicle drivers are calling out for changes. The VAT rate on a public charger is 20 per cent compared to just five per cent for home chargers meaning those who do not have access to a driveway or dedicated on-street parking are being hammered with extra chargers.
Key industry players like the RAC, AA and FairCharge have all called on the Government to introduce such changes to ensure drivers want to buy electric vehicles and have confidence that public chargers will get them from A to B without breaking the bank.
Some have even called on Chancellor Jeremy Hunt to roll back his own plans to tax electric vehicles from next year. Despite Hunt wanting to create a “fair tax system” for all drivers, experts fear it could further put people off from making the transition to electric.
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Drivers have been calling for a cut to VAT rates on public chargers
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Only time will tell whether Jeremy Hunt will actually make any big changes and remove the financial burden placed on drivers. Experts have already suggested that this Budget could make or break the Conservatives ahead of a hotly contested general election.
Previous Budgets have seen the Government introduce measures sparingly to help drivers, but it might be time for a Budget that addresses key issues which need addressing for over 40 million licence holders.