Autumn Statement 2023: what does it mean for motorists?
Wed, 22 Nov 2023
- No major announcements for motorists
- 5p per litre fuel duty cut remains… for now
- Improved grid access will boost EV chargepoints – but EV sales forecast cut
- Organisations now looking ahead to Spring Budget 2024
The Autumn Statement 2023 has passed by without major drama for motorists. Here, we outline what Chancellor Jeremy Hunt said – and what could be in store for the Budget 2024.
Fuel Duty
As with the Budget 2023 back in March, the so-called 5p per litre temporary cut in fuel duty remains. It was first announced in March 2022 and the lack of action in the Autumn Statement means it stays in place until March 2024.
Hunt said the measure saves the average driver around £100 over 12 months and has saved more than £200 since it was introduced in March 2022.
However, said FairFuelUK founder Howard Cox, the lack of any mention makes it likely the 5p per litre cut in duty could well be reversed in March 2024 – something he already is keen to label "economic and political suicide".
Cox also renewed calls for an effective pump pricing watchdog, a ‘PumpWatch’, with real teeth.
The Petrol Retailers Association didn’t overlook the lack of any announcement either – but remains hopeful Hunt can be convinced. "We are in the midst of a cost of living crisis," says executive director Gordon Balmer.
"While we are disappointed that no advance announcement has been made to freeze fuel duty, we look forward to persuading the Chancellor to make his announcement in his Spring Budget."
Charging infrastructure
The Chancellor plans to boost the electric car market with £2bn of investment and a pledge to reform the planning system in order to speed up the roll-out of chargepoints.
Amendments to the National Planning Policy Framework will "ensure the planning system prioritises the roll-out of EV chargepoints, including EV charging hubs."
A frustration of the EV industry is that despite many new chargepoints and charging hubs being rolled out, at great expense, too many remain standing idle while they wait for a connection to the electricity grid.
The Treasury says the plans will "look to remove unnecessary planning constraints by accelerating the expansion of EV charging infrastructure".
AA President Edmund King welcomed this investment, but added the motoring organisation "would still like to see incentives for drivers to help them to take part in the zero-emission transition when they are ready to do so."
Again, King is already looking ahead to the March Budget 2024, saying that "hopefully these incentives, a further freeze in fuel duty, and a cut in Insurance Premium Tax will be outlined in the Spring Budget."
Electric car sales
As part of its report for the Autumn Statement, fiscal watchdog the Office for Budget Responsibility has made a dramatic cut to its forecast for electric car sales.
It said the "steep sales growth of the past years, boosted by (usually high-income) early adopters, is expected to slow".
It now expects just 38% of new cars sold in 2027 to be EVs – almost half the 67% it forecast in the Spring Budget.
The OBR blamed a combination of high interest rates and falling fuel prices.
Car Tax
The Autumn Statement contained no specific changes to car tax rates, however, road tax rates will increase for almost everyone from April 1st 2024.
>> See the current 2023 car tax rates
The standard rate for 12 months tax is £180 while for alternative fuel cars is £170. This applies to cars registered from April 1st 2017.
For older cars registered before March 1st 2001, the 1549cc and below rate is £200 a year, while the higher rate is £325 a year.
Electric Car Tax
From 2025, electric vehicles will no longer be exempt from car tax. The change applies to electric cars, vans and motorcycles and will "ensure that all road users begin to pay a fair tax contribution as the take up of electric vehicles continues to accelerate", the Government said.
Currently, electric cars are exempt from both the annual £165 standard rate VED and the £335 premium supplement (also known as the 'expensive car supplement') for new cars with a list price of £40,000 or more.
Under the new rules new zero emission cars registered on or after 1 April 2025 will be liable to pay the lowest first year rate of VED (which applies to vehicles with CO2 emissions of 1g/km to 50g/km) currently £10 a year.
From the second year of registration onwards, they will move to the standard £165 rate.
The Government also intends to tax older electric vehicles, with those first registered between 1 April 2017 and 31 March 2025 set to pay the standard rate.
The Expensive Car Supplement exemption for electric vehicles is due to end in 2025. New zero emission cars registered on or after 1 April 2025 will therefore be liable for the expensive car supplement.
Other changes from April 2025, will see VED Band A scrapped for cars registered between 2001 and 2017. Instead they will all move to Band B.
This means that cars that currently qualify for zero road tax through VED Band A will pay £20 a year from 2025. This applies to popular models such as the Ford Fiesta, Volkswagen Golf and Nissan Qashqai, which emit less than 100g/km and currently have zero road tax.
Many of these small, more efficient petrol and diesel cars will be driven by essential workers and families already hit by the extraordinary rise in the cost of living.
A newer version of the same model car has higher CO2, why is this?
