The Autumn Statement: what it means for motorists

The road ahead following the Autumn Statement

Got money on the mind? You’re not the only one.

The highly anticipated Autumn Statement came this week and offers 110 measures and far-reaching implications for our pockets and the state of the UK’s economy.

The overall outlook still points to struggle, but there are, thankfully, some green shoots of hope. 

A slow global and UK economy, high levels of debt and global conflicts have informed an Autumn Statement homing in on reducing debts, taxes and rewarding workers. But how will this affect motorists?

First, let’s cross off some frequently asked questions about the Autumn Statement itself. Skip forward if you already have a basic understanding of the Autumn Statement and why it exists.

When is the Autumn Statement?

Jeremy Hunt, the UK’s Chancellor of the Exchequer, presented his annual Autumn Statement on Wednesday 22nd November 2023.

What is an Autumn Statement?

The Autumn Statement is an update on the government’s economic forecast and supporting strategies. 

What is in the Autumn Statement?

The Autumn statement reviews data on the current state of public finances as provided by the Office for Budget Responsibility (OBR) and the government’s own reflection on its ability to meet their financial objectives.

It considers the current state of the UK economy and proposes future changes to legislation to tackle issues and support growth.

This all forms the Economic and Fiscal Outlook (EFO) which is published twice a year: the Spring Budget and the Autumn Statement. 

How does the Autumn Statement affect me?

The Autumn Statement (and the Spring Budget) can impact everything from income and corporation tax, commodity duties, wages, benefits, local authority spending and industry funding or incentives. 

It affects us all differently depending on our own financial circumstances, where we live and work, the public services we use and where we spend our money.

The government's aim is to achieve better economic health through reduced borrowing, controlled inflation, and GDP growth. Each Autumn Statement is different and outlines specific strategies and targets for the upcoming fiscal year. 

What the Autumn Statement means for motorists

It’s no news flash that costs are rising. The automotive industry and those who run cars or fleets have not been exempt from this trend.

But has the latest Autumn Statement offered any lifelines?

Autumn Statement on fuel duty

The good news is that there is a hold on fuel duty.

The fuel duty reduction we saw in Spring 2022 forcibly lessened fuel duty by 5p per litre. This reduction was held again in this year’s Spring Budget and was done so again in this latest Autumn Statement.

The tax drivers will pay for fuel therefore remains at 53p per litre going until March.

Autumn Statement on electric vehicle (EV) manufacturing

The government also committed to £2 billion in investment into the zero-emissions sector, rewarding manufacturing. 

This has been praised by those recognising that improved UK production of EV technologies will drive down upfront costs. As one of the main barriers to entry for EV driving, this could mean improved affordability of electric cars in the future.

The Autumn Statement also included a commitment to investing in engineering apprenticeships. This forms part of a £50 million pound cash injection over 2 years to support skills and growth in automotive manufacturing in the UK.

Autumn Statement on EV charging

Criticism has stacked for a lack of attention for another significant barrier to entry for EVs: charging infrastructure.

This wasn’t addressed in the latest Autumn Statement, leaving many concerned over the stability of the public charging network, especially considering increased demand. Despite pressure, the government didn’t meet on reduced EV tariffs for public charging stations or investment to increase and improve the public charging infrastructure.

This is likely to see an increase in appetite for home charging, for those that are able.

Autumn Statement on car insurance

Another area of criticism for the Autumn Statement from industry experts includes the lack of change to insurance premium tax, which is currently at its highest in a decade.

As a significant factor in monthly motoring costs, a reduction in this tax would provide welcome relief for those currently subject to higher costs when insuring their vehicle.

Autumn Statement on road tax

Jeremy Hunt confirmed that vehicle excise duty (VED) rates will increase in line with inflation from April 2024. This will impact both first year and ongoing flat rates.

Zero-emissions vehicles will still be exempt until 2025.

Autumn Statement on public authorities

Following the Autumn Statement, public spending will increase slower than inflation.

A 0.5% growth in public sector productivity was cited, but this did not include investment in local government or public services.

Bad news, then, for the growing pot hole problem faced by local councils.

A summary

There are, as always, some winners and some losers in the automotive world because of this weeks’ update.

Although offering a mixed outlook and harbouring some key omissions, we do see some significant investment into UK automotive manufacturing and a hold on fuel taxation.

But, unfortunately, there is an increase in road tax coming.

Edmund King, AA president, summarises brilliantly,

“To help smooth the electrification journey, The AA welcomes plans to speed up access to the Grid, investment in zero emissions within the automotive industry and funding to attract new engineers into the sector.”

“We 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.

"Hopefully these incentives, a further freeze in fuel duty, and a cut in Insurance Premium Tax will be outlined in the Spring Budget.”

Here's looking forward to the Spring Budget in March, then!

Other important updates from the Autumn Statement

Of course, the impact of the Autumn Statement is not limited to our vehicles and roads. 

This list isn't all-encompassing, but here are some of the other top changes coming as a result of the latest proposal:

• A National Insurance reduction will be in place from January 2024
• State pension increase from April 2024
• Alcohol duty frozen until August 2024
• Maintained defence spending
• Universal Credit and other benefits increase from April 2024
• National Minimum Wage will increase from April 2024 with the eligible age lowered to 21
• Corporation tax relief on IT, machinery and equipment investment made permanent