Motoring groups and stakeholders have slammed missed opportunities in the Spring Statement after the Chancellor ignored calls to reverse the fuel duty hike and to cut VAT on
Motoring groups and stakeholders have slammed missed opportunities in the Spring Statement after the Chancellor ignored calls to reverse the fuel duty hike and to cut VAT on public charging.
As the conflict in the Middle East pushes up oil prices prompting fears of record high fuel prices amid evidence of panic buying among drivers, the Chancellor had been urged to abandon the upcoming increases in fuel duty.
Speaking during the Spring Statement this afternoon, Rachel Reeves referred to her announcement in the Autumn Budget to extend the 5p-a-litre fuel duty cut until 31 August 2026, but made no further announcements.
FairFuelUK, the prominent UK-based campaign group, said it was a missed economic growth opportunity for the Chancellor amid a new damaging oil crisis.
Howard Cox, founder of the lobby group, said: “With refineries, oil tankers and the Straits of Hormuz being targeted, oil prices will continue to climb relentlessly. A barrel of crude is, at the time of writing, already over $84 (13:00 3 March). This will add 5-10p per litre in the next week or so. A sustained rise in Brent to $100 could add 10-20p per litre to petrol and diesel within weeks, based on historical patterns – similar to the surges seen in 2022 when oil hit $120 amid the Ukraine invasion.”
Teletrac Navman, which had called for a fuel duty relief extension, has warned that the staggered increase in fuel duty from September 2026 piles more pressure on the fleet sector at a time when the industry is already facing significant challenges from soaring operational costs and repair expenses.
Barney Goffer, UK product manager, said: “With the current conflict in the Middle East pushing up the price of oil as well, operators are facing yet another layer of cost pressure.”
Richard Smith, managing director of the Road Haulage Association (RHA), said: “Ongoing global events means the world has shifted since the Budget. Fuel duty measures must evolve with it. We’re urging the Chancellor and Treasury to meet with us urgently on fuel prices.”
The RAC said drivers “really” shouldn’t see a shock jump in prices at the pumps as wholesale fuel costs had only been rising gradually in recent weeks.
Simon Williams, head of policy, added: “Even though the price of dated Brent crude rose by $5 a barrel yesterday to $78, the impact of this shouldn’t be felt for over a week. But knowing the tendency for price increases to be passed on far more quickly than cuts, on behalf of drivers we urge retailers not to put up the price of fuel they’ve already got in forecourt tanks and reflect any increases in wholesale fuel fairly on the forecourt.”
And Corpay, parent firm of Allstar, said the sharp move in oil markets over the weekend is a reminder of how quickly fuel costs can turn.
“For UK fleets, the key issue is not just whether pump prices rise, but how volatile they may become in the weeks ahead,” said Paul Holland, managing director for UK/ANZ Fleet at Corpay. “We know that even short-term disruption around the Strait of Hormuz, which carries around a fifth of global oil supply, can ripple through wholesale markets very quickly.”
The Spring Statement also failed to deliver on industry expectations for EV charging relief.
What Car? had predicted that the Chancellor would cut the 20% VAT rate on public charging to match the 5% domestic VAT rate for electricity, after years of campaigning to end the disparity where drivers without off-street parking pay higher taxes to charge their vehicle.
Last week, a UK tax tribunal ruled that VAT on public vehicle EV charging should be cut from 20% to 5%. It’s not known yet whether HMRC will appeal.
Jon Lawes, managing director at Novuna Vehicle Solutions, said the Spring Statement was a missed opportunity to show crucial support for EV drivers, ahead of plans to introduce the new mileage-based Electric Vehicle Excise Duty (eVED) in the UK from April 2028.
“With no new measures to ease the burden of rising running costs, drivers are being left to cope with the financial pressures of eVED and wider motoring costs on their own. The EV transition is accelerating, but this lack of policy action risks undermining confidence and leaves drivers without the reassurance they need to make the switch.
“Affordability and consumer confidence are key to keeping EV adoption moving in the right direction, and drivers need to see consistent support, particularly in the growing used EV market. As eVED rates rise, the Government must keep up with the costs people are facing, especially if they want to show that making the switch to electric can be a viable option for all.”
Despite some expectations of big announcements, the Government stuck to its guns that there will be no new policy or amendments in the Spring Statement, with just one major fiscal event a year.
Instead, the forecast – overshadowed somewhat by the rising tensions in the Gulf – focused on responding to updated economic forecasts from the Office for Budget Responsibility (OBR), while reinforcing fiscal stability and economic resilience.
The latest interim report says that average growth across the forecast period is largely unchanged, while the OBR has adjusted the profile of GDP so that it grows slightly slower in 2026, and then faster in both 2027 and 2028. In this way, GDP is forecast to grow by 1.1% in 2026, 1.6% in both 2027 and 2028, and 1.5% in both 2029 and 2030. Overall, GDP is forecast to grow by 5.6% across the course of this parliament.
Unemployment is set to peak later this year and then fall gradually, ending the forecast period at 4.1% – lower than it was at the start of the parliament.
UK inflation is forecast to be at or around the target level of 2% over the next five years.
The forecast also shows that public sector net borrowing is set to fall from 4.3% this year, to 3.6% next year, then to 2.9%, 2.5%, and to 1.8% in 2029-30.
The Chancellor said the OBR forecasts show that Labour is delivering the “right economic plan for the country”.
Giving its initial response to the OBR forecast, the Institute for Fiscal Studies said: “The main fiscal story remains the same. The UK’s public finances are vulnerable. Debt is high, and set to only just stabilise as a fraction of GDP by the end of the decade. Borrowing also remains high. The government plans to bring it down rather rapidly, from 4.3% of GDP in 2025-26, to 3.6% in 2026-27, and 1.8% by 2029-30, at which point all borrowing is intended to be for investment only and for debt to be stable. The big question – which remains as central as ever after today’s statement – is whether those plans can be delivered.”
