What does the Spring Budget 2024 mean for you and your wallet?

The always-anticipated-with-bated-breath Spring Budget came this week, and with it, a few seeds of hope that the upcoming year might not be so bleak.

Though the term ‘cost of living crisis’ doesn’t seem to be disappearing from our screens any time soon, and 2023 was a year that I think most of us would like to forget, 2024 seems more hopeful.

Perhaps it’s just that the sun came out this week.

But nevertheless, the Spring Budget represents a chance for growth, and an opportunity for the government to set out the ways in which they plan to grow the economy and make life a little easier for us all.

But how does the Spring Budget affect motorists?

When is the Spring Budget?

Chancellor of the Exchequer, Jeremy Hunt, presented the annual Spring Budget on Wednesday 6th March 2024.

What is the Spring Budget?

The Spring Budget, presented every year in March, is a chance for the Chancellor of the Exchequer to set out the government’s progress in delivering the growth strategy from the Autumn Statement, which was presented last November, and propose future changes to tackle widespread issues and support the growth of the economy.

It considers the current state of the UK’s economy, and the measures taken in the previous year. It can impact everything from income and corporation tax to wages and benefits, local authority spending, and industry funding or incentives.

The Spring Budget and the Autumn Statement are presented every year, and between them form the Economic and Fiscal Outlook.

How does the Spring Budget affect me?

The Spring Budget will affect us all differently.

How the Spring Budget affects you will depend on your specific financial circumstances, your lifestyle, where you live and work, where you like to spend your hard-earned cash, and the public services you use.

Ultimately, each Budget is different, and targets different areas with specific strategies for the upcoming fiscal year.

Pile of coins

What the Spring Budget means for motorists

Most of us are keeping a close eye on our pennies, with rising costs across the board forcing us to be a little more careful about where we spend and where we save.

With the majority of us relying on our cars and vans to get to work and school, for family holidays, day trips out, and even to run our businesses, there’s no escaping that we need to spend money on automotive costs.

But has the Spring Budget given us any reprieve?

How has the Spring Budget affected fuel duty?

Jeremy Hunt has confirmed that he is freezing fuel duty once again, and has announced that the temporary 5p-per-litre discount announced by then-Chancellor Rishi Sunak in 2022 will remain in place for a further 12 months, until March 2025.

This means that fuel duty remains at 52.95p for the next year, which the government has said will save the average driver £50 in the next year, bringing total savings since the 5p cut was introduced in March 2022 to £250.

It’s news that will likely come as a welcome relief to motorists who are facing higher driving costs across the board, with insurance premiums and vehicle repairs rising. The RAC has calculated that keeping the cut will save motorists around £3.30 every time they refuel.

Mr. Hunt said that ‘if I did nothing, fuel duty would increase by 13 per cent this month.’

After a drop in fuel pump prices, treasury officials initially pushed to get rid of both the freeze on fuel duty and the 5p cut, but Jeremy Hunt said that this decision was ‘politically untenable.’

Fuel duty itself has been frozen at 57.95p per litre since 2011. The Social Market Foundation (SMF) has calculated that the past 14 years of frozen duty – and the recent 5p-per-litre cut – has cost the Treasury £130 billion.

What is fuel duty?

Fuel duty is an indirect tax. It’s included in the price of the fuel that you pay for at the pump, and currently stands at 52.95p per litre after the 2022 cut.

It’s been frozen at this level since 2011, and currently makes up just over a third of the price you pay at the pump.

Fuel duty isn’t the only tax – VAT is also charged on fuel, meaning that as it stands, taxation makes up over half of what you pay every time you fill up.

However, fuel duties are a significant source of income for the government.

Combined with Vehicle Excise Duty (road tax), the Treasury generates approximately £35 billion each year from taxation, around 20% of which is spent on road maintenance, with the rest used for general government expenditure.

toy car with a toy person sat on top

How has the automotive industry responded to the Spring Budget?

This year’s Spring Budget has attracted widespread criticism from the wider industry by not going far enough.

Many have said that the 2024 Spring Budget doesn’t go far enough to cut the cost of driving for motorists, especially with there being no support to help specifically younger drivers with spiralling costs.

IAM RoadSmart director of policy and standards, Nicholas Lyes, has said that the Chancellor should have considered a cut to Insurance Premium Tax (IPT) for under-25s, who often deal with premiums that exceed £2000.

Others have criticised the lack of support for the transition to electric vehicles (EVs).

Though the government introduced the Zero Emissions Vehicle mandate this year, which requires a certain percentage of manufacturer’s new sales to be electric, Jeremy Hunt did not announce any measures to help buyers make the switch.

Summary of the Spring Budget

It’s not all bleak news.

The announcement that fuel duty remains frozen at the 2011 rate will be a welcome relief to those who feared it might rise, and with the economy forecast to grow this year, the Autumn Statement could be a different story.

Though we’d like to see EVs get more focus, and the transition to EV incentivised, especially ahead of the 2035 ban on new petrol and diesel models, we still have high hopes for the year ahead.

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Beth Twigg

Beth Twigg

Beth is our Content and Paid Media Specialist, tasked with creating great articles to keep you both entertained and informed. She has two years previous experience, but has been writing and scribbling for much longer.