How will the Spring Budget impact drivers?

How will the Spring Budget impact drivers?

Chancellor Jeremy Hunt revealed his Spring Budget last week, addressing two key policies that are going to impact drivers across the UK. While the automotive sector wasn’t one of the sectors focused on for changes, there are still several key plans addressed in the latest budget that will affect drivers.

In the Autumn Spring Budget, the Chancellor focused on updates to electronic vehicle taxation, company car taxation, VAT on EV charge points and Insurance Premium Tax (IPT). This time, the Chancellor has focused on funding for potholes and a continuing freeze on fuel duty.

So, how will these proposals impact drivers?


Chancellor Jeremy Hunt has pledged £200m to local councils in order to help fix potholes across the United Kingdom. This is a 20% increase to the funds set aside to deal with the issue.

The Chancellor stated: “Following a wet then cold winter, I have received particularly strong representations about the curse of potholes.

“The Spending Review allocated £500m every year to the Potholes Fund but today I have decided to increase that fund by a further £200m next year to help local communities tackle this problem.”

Research by GoCompare, who looked into three years’ worth of pothole Freedom of Information (FOI) request data (collected from councils across the UK), found that councils spend roughly £99m a year on fixing potholes. Using this data, the study found that the UK’s total potholes stretch more than 115, 846m in width. This would be equivalent to 115km or 72 miles.

By pledging more money into fixing potholes, this will benefit all road users positively. Not only does it enhance the look of the roads, but it reduces the risk of unnecessary vehicle damage, and reduces the risk of injury to motorists and pedestrians.

Fuel Duty

The reduction in fuel duty was initially introduced as a temporary measure that was meant to end this spring. The Chancellor announced that, in an attempt to help households across the UK, the potential 12p rise in fuel duty will be cancelled, maintaining last year’s 5p cut for a further 12 months. The Government believes that this will save typical drivers £100 a year. This freeze on fuel duty will provide welcome short-term relief to those struggling with rising costs.

With fleets facing record pump prices at the start of last year, fuel duty was cut by 5p per litre by Rishi Sunak, who was the Chancellor at the time, after being frozen at 57.95p per litre since 2011.

RAC head of Roads Policy Nicholas Lyes said: “We welcome the Government’s decision to keep the 5p fuel duty cut in place for another 12 months.

“The cut has given drivers some much-needed relief in what has been the most torrid year ever at the pumps, with price records being broken even after duty was cut. Given the importance of driving for consumers and businesses, duty should be kept low to help fight inflation.”

Other announcements

Vehicle Excise Duty (VED) uprating and Heavy Goods Vehicles (HGV) VED freeze

The government will uprate VED rates for cars, vans and motorcycles in line with RPI from April 1, 2023. To support the haulage sector, VED for Heavy Goods Vehicles will remain frozen for 2023-2024.

Reforming the HGV Levy

The Government plans to introduce a new reformed HGV levy from August 2023, following the planned end of the current levy suspension period. This reform will be a step towards reflecting the environmental performance of the vehicle. The Government remains committed to ensuring that the levy applies to all HGVs using the UK road network.

National funding

£8.8bn is being set aside to help develop mass transit networks and sustainable transport options across England’s city regions. This amount will cover 2027-28 to 2031-32. The third round of the ‘Levelling Up Fund’ has been confirmed, with a further 1bn of support offered to local communities to invest in infrastructure projects.

Electric Vehicles

While there were no new announcements since the Autumn Statement regarding electric vehicles and EV infrastructure, electric cars are still not subject to road tax charges until 2025. From 2025, electric vehicle drivers will begin paying road tax.


The main aims for the Spring Budget are as follows:

Growing the economy – The Spring Budget strategy is to deliver long term sustainable growth, by focusing on four key priorities: “Employment, Education, Enterprise and Everywhere.”
Halving Inflation – The Bank of England has taken steps towards controlling inflation by raising interest rates. The Office for Budget Responsibility (OBR) is now forecasting that Consumer Price Index (CPI) inflation will fall to 2.9% by the end of 2023.
Getting debt falling – Public debt now stands at almost £2.5 trillion, or 98.9% of GDP.

How will the Spring Budget impact drivers?

Useful links:

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