27 February 2024
The AA is calling for a range of measures to help provide confidence for drivers now, and for the future, ahead of the Chancellor’s Budget next week (Wednesday 6 March).A continued freeze in Fuel Duty to help keep pump prices affordable and not fuel inflation, reducing VAT for on-street EV charging from 20% to 5% and the reintroduction of incentives for drivers wishing to buy an EV are just some of the policies The AA has submitted to the Treasury.
On Vehicle Excise Duty, The AA has argued that there should be no increase above inflation and whilst accepting the introduction of VED for EVs after 2025, the motoring organisation believes the rates applied to EVs should remain lower than for petrol and diesel vehicles to act as an incentive.
“The Chancellor has the chance to give confidence to drivers now, and for the future, in the final Budget before the General Election.”
One major policy that has been suggested is a cut in Insurance Premium Tax (IPT) to help reduce the cost of insurance. The AA has argued for Government to cut Insurance Premium Tax by 25% for all drivers but go further for young drivers with at least a 50% cut as the higher cost of insurances falls disproportionately on younger drivers*.
Investment in jobs and EV infrastructure needed
The AA is also proposing a new Skills Funding Agency to help increase the number of skilled workers within the automotive repair sector. With the rise of electric vehicles on the market, as well as the rise of semi and fully autonomous vehicle technology installed in vehicles, The AA has argued that more needs to be done to prepare the future workforce. Similarly, a review of the existing Apprenticeship Levy is required to bring in more flexibility to help young people access the automotive sector.
Elsewhere, The AA is calling for more investment in publicly available EV charging to help dispel the public’s perception that the current number of chargepoints are too low.
Jakob Pfaudler, AA CEO, said; “The Chancellor has the chance to give confidence to drivers now, and for the future, in the final Budget before the General Election.
“To help households tackle the cost-of-living crisis, maintaining the freeze in fuel duty and equalising VAT for on-street EV charging to match domestic energy rates would be a great first step. Similarly, help to make the cost of compulsory insurance more affordable, especially for younger drivers, would be well received.
“Future proofing the automotive workforce is needed too, and the creation of a new Skills Funding Agency would help drivers in the years to come. Investing in school and college students in this exciting sector will help keep people on the road and instep with vehicle technology.”
* Motor Insurance Premiums Continue to Rise as Insurers Battle Costs | ABI