Budget leaves drivers in the dark and out of pocket

BUDGET 2025: The Car Expert’s Stuart Masson is not impressed by chancellor’s muddled messages

The chancellor’s Autumn Statement feels like another round of Westminster whack-a-mole, with policies appearing and disappearing in ways that leave the average driver no better informed. Beyond the specific automotive measures, this was a Budget that provided little clarity or stability for motorists already grappling with rising insurance premiums, higher borrowing costs and persistent inflation in day-to-day running expenses. Although presented as a plan to support working households and UK businesses, many drivers will find it difficult to pinpoint anything that genuinely makes their lives easier.

First off, the planned 3p-per-mile levy for EVs and 1.5p for plug-in hybrids is a serious own goal and will undoubtedly impact sales negatively. A typical EV driver doing 10,000 miles a year will pay an extra £300, on top of the hassle of reporting mileage and the uncertainty of not knowing the final bill – who can say today what their mileage will be next year with 100% certainty? It is clearly the thin end of the wedge. Then, let’s be honest… A 3p levy today will become 4p, then 5p, then 10p. This will deter EV buyers right now, even though the tax does not arrive until 2028.

Freezing fuel duty again sends an equally muddled message. The government is increasing taxes on EV owners while shielding petrol and diesel drivers, yet expecting people to switch to electric. Fuel duty rises have been cancelled for more than a decade, which shows the system is broken. If you cancel an increase every year, it is not a real policy. It is political theatre.

That said, raising the luxury car tax threshold from £40,000 to £50,000 is a welcome correction, but the delay until April 2026 will cause buyers to hold off on cars in that price range. A backdated change would have supported sales instead of stalling them. If you're looking at a £40K-£50K car, why would you buy one now when it will get £2.4K cheaper in April 2026?

Pushing the Employee Car Ownership Scheme (ECOS) changes into next year is another example of kicking the can down the road. Either commit to the policy or scrap it. The uncertainty affects new and used car supply and highlights the UK’s fixation on registration numbers rather than genuine sales. The constant cycle of preregistered demonstrators is part of the same problem.

Meanwhile, extra money for EV grants is good news for manufacturers, but it does not help the people who most need support. A used EV grant tied to a scrappage scheme would be far more effective in helping lower income drivers move out of old petrol and diesel vehicles. The current approach offers no help to those buyers today, or ones looking to swap to a used EV.

Changes to Motability could be a positive shift if they focus support on locally built, reasonably priced models. With only about 7% of Motability cars built in the UK, the target of 25% by 2030 still feels underwhelming. Motability is vital for independence, but its rapid growth and inclusion of high priced models have raised valid concerns about value for taxpayers.

Finally, an extra £200m for EV charging is welcome, but it must be directed toward regions that have been consistently underserved by private investment. Planning applications also need to be processed far more quickly so new chargers can actually get built. However, there was nothing on capping public charging prices or cutting VAT for people who rely on public chargers. The chancellor is still penalising anyone without private parking, which is yet another missed opportunity to help lower income households switch to electric.

I’ll close on this – beyond the announcements themselves, the rollout of the Budget was unusually disordered and, for many, risked undermining the policies being set out. Much of the public appeared aware of key measures before the chancellor had even risen in Parliament, generating confusion and speculation rather than clarity or confidence. It was a misstep on several fronts, and the communication surrounding it felt more muddled than ever.
 
Stuart Masson is editorial director of The Car Expert