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Fuel Duty Frozen For 12th Straight Year In Autumn Budget

Chancellor Rishi Sunak announced a 12th-straight freeze in fuel duty as part of his Autumn Budget for 2021, in an effort to protect families and small businesses – but his decision comes against a backdrop of UK fuel prices being at their highest level for 8 years.

The average price of a litre of petrol in the UK currently stands at almost £1.43, as demand for fuel surges in the wake of the worst of the coronavirus crisis.

However, by freezing fuel duty at 57.95p a litre, Mr Sunak said the decision amounted to a saving of almost £8 billion across the next 5 years. And, tracing the fuel-duty freezes back, the Chancellor also claimed that the average car driver has saved a total of £1900.

There was also good news for heavy goods vehicles’ (HGVs) drivers and operators, as the Budget also saw frozen Vehicle Excise Duty (VED) rates for HGVs in 2022-23, as well as the HGV Levy – a road-uzer tax that will penalise vehicles of more than 12 tonnes – being suspended for another 12 months from August 2022.

Funding has also been allocated to improve the standard of facilities in lorry parks across the country. All of these are moves designed to placate the haulage industry, which has been struggling to find drivers in post-Brexit UK. Earlier in 2021, shortages on supermarket shelves and the fuel crisis of September were both linked to issues in the HGV trade.

Beyond these measures, news for motorists in the Autumn Budget 2021 also included investments of £24bn into the roads, with £2.6bn allocated for more than 50 local road upgrades between 2020-2025 and another £5bn set aside for maintenance of local roads, which would sort out millions of potholes that cause problems for drivers in terms of wheel repairs.

Looking to the future and the increasing shift to electric power ahead of 2030, a pot of £6.1bn has been granted to the Transport Decarbonisation Plan for greener, zero-emissions vehicles, which will include £620 million for public charging in residential areas and also targeted plug-in vehicle grants, following a similar allocation of £1.9bn in 2020.

Another £49m will go to Northern Ireland’s Levelling Up Fund, principally to upgrade the electric vehicle charging network in the country.

News of the Budget was greeted with some indifference by leading industry bodies. Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders (SMMT), said: “The effects of the pandemic continue to hurt businesses across the sector – supply chain disruption, skills shortages and punitive energy costs.

“The Budget included some significant steps, most notably in adjusting business rates to allow relief on renewable energy and the extension of the super-deduction. Together with the Global Britain Investment Fund, which provides £817m to support the transition of automotive manufacturing, and the £620m announced last week for incentives, as well as investment in charging infrastructure, these are a recognition of the importance of the automotive sector and its ability to drive innovation and exports, and to create well-paid, highly skilled, green jobs across the country.

“However, if we are to attract the investment in plant and machinery that a modern, competitive and decarbonised industry needs, a more fundamental change in business rates is still necessary – one that actually incentivises the continued investment that factories need to be at the cutting edge of operational efficiency. The Budget was also a missed opportunity to support the many supply chain businesses which are suffering cash flow shortages due to stoppages arising from the semiconductor shortages.”

And the British Vehicle Renting and Leasing Agency (BVRLA) wasn’t impressed, either. Gerry Kearney, the organisation’s chief executive, added: “The Chancellor has missed an opportunity to give the industry essential clarity when it is most needed. At a time when the uptake of electric vehicles is ready to accelerate, the silence around areas such as benefit-in-kind tax rates is deafening. This only grows fears that rates will be drastically increased down the line.

“BVRLA members had clear asks for this Budget. The Chancellor has failed to give tangible details on these asks, meaning that questions remain over what the Government’s plan is. The Net Zero Strategy recently announced marks a very positive step in the right direction; what we needed in this Budget was more detail. Instead, we have been given headlines that offer no clarity, no foresight and no confidence.”

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