Drivers could face potential risks with car tax and insurance changes under the Labour government, as Chancellor Rachel Reeves considers raising fees. The Autumn Budget and fiscal statement are set to be revealed on October 30, prompting concerns among motorists. This year has already seen insurance prices soar, with the average cost now at £861. John Cassidy, managing director of sales at Close Brothers Motor Finance, emphasized the growing financial burden on drivers and urged the Chancellor to address these issues through policy interventions. He highlighted the need to take action on insurance premiums, road tax, and fuel duty, as these measures would be well-received by the public.
The rising costs of car ownership are making it increasingly difficult for many drivers, especially during a time when financial pressures are mounting. Manufacturers have even started scaling back on electrification plans, raising questions about the feasibility of the government’s net zero ambitions. Incentives could play a vital role in encouraging the transition to more sustainable vehicles, particularly with the potential reinstatement of the 2030 ban on new petrol and diesel cars.
Hannah Gurga, Director General at the Association of British Insurers, acknowledged the challenges faced by motorists in recent years and highlighted efforts to address the cost of claims impacting insurance premiums. While there has been a slight decrease in average premiums, Gurga emphasized the importance of maintaining momentum in reducing costs. The association is actively contributing ideas to a taskforce aimed at addressing these issues, building on a 10-point roadmap released earlier in the year.
It is evident that drivers are facing significant financial pressures, with the cost of owning and maintaining a vehicle steadily increasing. The upcoming Autumn Budget and fiscal statement will be crucial in determining the government’s approach to addressing these challenges and supporting motorists. As the Labour government considers potential changes to car tax and insurance fees, it is essential to strike a balance between fiscal responsibility and ensuring affordability for drivers. Collaborative efforts between policymakers, industry stakeholders, and consumer groups will be vital in navigating these complex issues and finding sustainable solutions for the future of motoring in the UK.
