5:08 am, October 29, 2026
Motor trade leaders have criticised the Chancellor’s Autumn Budget for failing to deliver meaningful support for automotive businesses, with industry bodies warning that rising costs, skills shortages and uncertainty over electric vehicle policies continue to threaten the sector.
Chancellor John Healey’s first Budget included an extension of the fuel duty cut, an expansion of business rates relief and measures aimed at reducing household energy bills.
However, automotive organisations have expressed disappointment over the lack of targeted support for garages and the failure to address some of the industry’s biggest challenges.
Stuart James, chief executive of the Independent Garage Association (IGA), was particularly critical of the announcement, arguing that small automotive businesses had once again been overlooked.
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Fuel duty freeze extended but car dealers face higher wage bills as Chancellor unveils Autumn Budget
He said: ‘Having heard all the rhetoric about this being a budget for growth and for businesses big and small, the reality is that the budget does not go far enough to alleviate independent garages from the financial constraints that have been placed upon them following consecutive budgets that have hammered small businesses.’
The Chancellor announced an increase in the small business rates relief threshold from £12,000 to £18,000 for retail, hospitality and leisure businesses, but the IGA warned that many independent garages would not qualify.
James added: ‘Today continues the trend of disappointing budgets from an independent garage owners’ point of view. We have seen very little tangible support from the Chancellor in today’s budget announcement with no motivation for growth or the recruitment of young people.
‘Whilst there has been a willingness from government to increase cost burdens across recent budgets, we have seen no willingness to address the MOT fee which has now remained frozen since 2010.
‘Despite several references to providing breathing space to businesses, there was very little contained within the budget that will offer any form of immediate relief to independent garages.’
Meanwhile, the Institute of the Motor Industry (IMI) said the Budget had failed all three of its tests for supporting the automotive workforce.
The organisation had called for reforms to the Growth and Skills Levy, targeted investment in recruitment and retention, and greater support for training in emerging vehicle technologies.
Nick Connor, chief executive of the IMI, said: ‘The sector is facing a perfect storm of workforce shortages, an ageing vehicle parc and rapid technological change, yet today’s Budget does nothing meaningful to address it.
‘Without targeted investment, those pressures will hold back productivity, slow the adoption of new technologies and increase the risks for employers and motorists alike.’
The IMI said there were approximately 17,000 motor trade vacancies between June and August 2026, while demand for EV skills had risen 83% in a year.
It also warned of a projected shortage of more than 43,000 EV-qualified technicians by 2035.
Connor added: ‘Growth, net zero and safer roads all start with the people who keep Britain’s vehicles on the road.’
Will the Budget help car sales?
Despite the criticism, some industry leaders believe measures aimed at easing household costs could help maintain demand for new and used vehicles.
Philip Nothard, insight director at Cox Automotive and chair of the Vehicle Remarketing Association, welcomed the support for consumers but warned that major questions remained unanswered.
He said: ‘It is positive to see today’s budget include a raft of announcements aimed at easing pressure on the cost of living.
‘As such, we hope this translates into improved consumer confidence and higher demand in the new and used car markets.
‘It is also positive to see no obvious increase in taxation for buyers and improved support for the electric vehicle industry, but many questions remain unanswered.’
Nothard highlighted continuing uncertainty surrounding the proposed Electric Vehicle Excise Duty (eVED) scheme, the outcome of the ZEV mandate consultation and negotiations between the UK and EU over future automotive trade rules.
James Tew, chief executive of iVendi, also suggested that the Budget was unlikely to dramatically alter conditions in the used car market.
He said: ‘We’re in an odd moment where businesses in general and within the used vehicle sector specifically often feel under considerable pressure but simultaneously, the market and the wider economy are proving remarkably resilient.
‘Little in the Budget changes that picture, although there is targeted help for some businesses with energy costs and encouragement for start-ups.’
He added: ‘Where the Chancellor might have an impact is by maintaining consumer confidence, which has see-sawed in recent months in line with rising and falling oil prices.
‘If a reasonable level of feel-good momentum can be maintained by measures such as the modifications to gas standing charges, and car buyers feel they have disposable income, that is good news for our sector.’
EV concerns remain despite charging support
Electric vehicle organisations welcomed some of the Budget’s charging measures but questioned whether the government was doing enough to make the switch affordable.
The Chancellor announced £100m in funding to help reduce public charging costs and plans to explore allowing drivers to access their domestic electricity tariffs at local public chargepoints.
However, VAT on public EV charging remains at 20%, compared with 5% on domestic electricity.
Iain Reid, global content director at Carwow, said: ‘Extending the VAT cut on domestic electricity will help EV drivers who charge at home, but we had hoped to see VAT on public charging reduced from 20% to 5% to bring it in line with home charging.
‘Our research found that 62% of motorists support this change, as the cost of public charging remains a significant barrier for drivers without a driveway or access to a home charger.’
He added: ‘Ultimately, making EVs more affordable is about giving drivers confidence in the long-term cost of ownership, not just the upfront price of a vehicle.’
Carwow’s research also found that 63% of motorists planning to change their car had delayed their decision until after the Budget.
Meanwhile, Ian Plummer, chief customer officer at Autotrader, welcomed the extension of the fuel duty cut but raised concerns about the government’s planned pay-per-mile charge for electric vehicles.
He said: ‘The Chancellor’s fuel duty freeze will be a relief for millions of motorists struggling with the cost of living.
‘But the government is still planning to hit electric vehicle drivers with pay per mile duty in 2028, putting up costs and putting a handbrake on their own efforts to get people buying electric cars.’
Tanya Sinclair, chief executive of Electric Vehicles UK, was similarly critical.
She said: ‘The Chancellor has addressed the immediate pressure on household budgets, but the Government cannot claim to be helping motorists with one hand while making the transition to electric harder and more expensive with the other.
‘Electric motoring is already helping drivers escape volatile pump prices, and many more could benefit if the government tackled the policy barriers keeping public charging unnecessarily expensive, particularly for those without driveways.’
However, Ben Nelmes, chief executive of New AutoMotive, welcomed plans to allow drivers without home charging to access cheaper electricity tariffs.
He said: ‘It is good to see the Chancellor taking steps to allow drivers to use their home electricity tariff at their local charge point. It is vital that this work moves at pace to end Britain’s driveway divide.’
Dr Vicky Edmonds, chief executive of EVA England, also welcomed the proposed changes and £100m support package, although she said equalising VAT on domestic and public charging would have provided more immediate assistance.
Oliver Brighton, chief financial officer at charging provider char.gy, said the government’s devolution measures could help councils develop neighbourhood-wide charging networks, provided they were given long-term funding certainty.
Investment in electric vehicle infrastructure
Elsewhere, the Chartered Institute of Logistics and Transport (CILT UK) welcomed the fuel duty extension but warned that high electricity costs and limited grid capacity continued to create problems for businesses investing in electric commercial vehicles.
Daniel Parker-Klein, director of policy and communications at CILT UK, said: ‘We need to look beyond immediate cost pressures and ensure businesses have the confidence and practical support to invest in sustainable transport.
‘But high electricity costs and limited grid connections continue to make investment in electric vehicles, charging facilities and electric rail services challenging – and most importantly less appealing.’
Simon Smith, chief executive of charging infrastructure firm Voltempo, also called for greater investment in grid connections to support electric commercial vehicle fleets.
He said: ‘The Depot Charging Scheme is a welcome step, but funding chargers without the infrastructure to run them risks leaving businesses with equipment they cannot use.’
The Budget’s extension of the 5p fuel duty reduction until July 2027 was also met with a mixed response from motoring organisations.
RAC senior policy officer Rod Dennis warned that the freeze would not actually reduce current pump prices, while AA president Edmund King called for greater support for motorists, particularly those driving diesel vehicles.
Dennis said: ‘A freeze only avoids making an already difficult situation worse – it doesn’t make filling up any cheaper.’
The industry is now awaiting further detail on the government’s EV taxation plans, the outcome of the ZEV mandate consultation and future automotive trade arrangements with the EU.