Autumn Budget 2021: what does it mean for motorists?

A planned hike in fuel duty has been axed in the Autumn Budget, and Chancellor Rishi Sunak has confirmed extra money for road maintenance and electric car infrastructure...

Rishi Sunak briefcase

Chancellor Rishi Sunak has announced in his Autumn Budget that a planned rise in fuel duty for next year has been scrapped. This means that fuel duty will be frozen for the 12th year in a row at 57.95p per litre, saving the average motorist around £1900 per year and amounting to total savings of more than £8 billion since the duty was first frozen in 2008.

The Chancellor said the freeze would save motorists an average of £15 per tank for cars, £30 for vans, and £130 for HGVs compared with pre-2010 levels. Announcing the measures, the Chancellor said he was "not prepared to add to the squeeze on families and small businesses".

The change comes with petrol prices at their highest level in eight years, an average of 142.94p per litre. This is largely due to a sudden spike in energy demand, as the country begins to emerge from the coronavirus pandemic.

Electric Highway charging stations with Audi e-tron Sportback

The Government also reiterated its pledge of an extra £350 million to support the electrification of UK vehicles and their supply chains, as well as an extra £620 million for electric car grants and infrastructure. This, however, was recently announced as part of its Net Zero Strategy in the lead up to the COP26 climate summit, which is due to begin on 31 October.

Sunak also announced investment in transport infrastructure, with £21 billion being invested in roads nationwide. Of that amount, £5 billion is understood to have been set aside for maintenance and repairs.

The Autumn Budget was largely focused on post-Covid 19 recovery, with investment aimed at growth, public finances and employment. 

How has the car industry reacted to the budget?

The Asphalt Industry Alliance welcomed the funding for new roads, but Chairman Rick Green said that "at least" an additional £1.5 billion per year was needed "if the backlog of repairs [is to] be tackled and further decline prevented".

Mini petrol station

Edmund King, AA president, said the Chancellor's budget was "pragmatic", and that it would bring "some ‘pump relief’, but the pain of record petrol prices remains. He adds: "Our research suggests that when fuel prices are high, lower income drivers cut back on general household expenditure, including food and heating, to keep their cars on the road. Freezing duty will help these drivers.”

The Petrol Retailers Association welcomed the freeze on fuel duty, but also noted that the cost of filling a 55-litre tank of fuel is currently £20 higher than in May 2020. The average motorist fills their car completely twice a month, so their fuel bills have increased by £40 a month over the past year.

The Society of Motor Manufacturers and Traders said that although today's budget included "some significant steps", more was needed to help the motor industry. Chief Executive Mike Hawes said the budget was "a missed opportunity to support the many supply chain businesses which are suffering cash flow shortages due to stoppages arising from the semiconductor shortages".

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