The AA has called for a continued freeze in fuel duty in next week’s Spring Budget to help keep pump prices affordable and not fuel inflation.
It’s one of several key requests that the motoring services organisation, a partner at this year’s Great British Fleet Event, says will provide confidence for drivers.
Other policies that the AA has submitted to the Treasury include a call for no increase above inflation on Vehicle Excise Duty. And while it says it’s accepted the introduction of VED for EVs after 2025, it argues that the rates applied to EVs should remain lower than for petrol and diesel vehicles to act as an incentive.
The AA is also calling for a reduction in VAT for on-street EV charging from 20% to 5% and the reintroduction of incentives for drivers wishing to buy an EV.
One major policy that it’s suggested is a cut in Insurance Premium Tax (IPT) to help reduce the cost of insurance. The AA has called for the Government to cut Insurance Premium Tax by 25% for all drivers but go further for young drivers with at least a 50% cut as it says the higher cost of insurances falls disproportionately on younger drivers.
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, it says 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 charge points 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.”
