1:00 pm, March 15, 2023
Chancellor Jeremy Hunt announced a host of support for families and businesses across the UK with a strong message of ‘prosperity with a purpose’ and a goal to drastically reduce inflation.
Motorists were high on the agenda, with the chancellor announcing that fuel duty won’t rise as planned for later this month.
He said that ‘because inflation remains high, I have decided now is not the time.’
The spring budget was announced today against a backdrop of challenging times in many aspects of UK personal and business life.
Hunt announced his four pillars of industrial strategy, which are ‘enterprise, employment, education and everywhere’.
While there was lots of support for businesses and workers, there was no mention of electric vehicles as many had hoped for.
Here’s what will affect dealerships and employees from the 2023 spring budget.
Fuel duty
The chancellor announced that fuel duty would be frozen for another 12 months, putting around £100 back into the pockets of drivers.
The chancellor said: ‘For a further 12 months I’m going to maintain the 5p cut and I’m going to freeze fuel duty too.
‘That saves the average driver £100 next year and around £200 since the 5p cut was introduced.’
Speaking ahead of the speech, AA president Edmund King commented: ‘Drivers are out of the hurricane, but are still being lashed by the cost-of-living storm.
‘It would be detrimental to put unnecessary strain on people by increasing fuel duty. Most goods and services are transported by road, so waving through higher pump prices onto logistics firms as well as the driving public will hurt everyone.
‘Our message to the Chancellor is that hiking fuel duty will simply fuel inflation, so it is imperative that he keeps the fuel duty freeze for another year.’
Employment
One of the government’s biggest issues has been how do they fill the drastically lower number of people working since the pandemic.
The Chancellor set out plans to encourage older people back into work, saying: ‘Today I take three steps to make it easier for those who wish to work longer to do so.’
‘First, we will increase the number of people who get the best possible financial, health and career guidance ahead of retirement by enhancing the DWP’s excellent ‘Mid-life MOTs’ Strategy.
‘Second, with the Education Secretary, we will introduce a new kind of apprenticeship targeted at the over-50s who want to return to work. They will be called ‘Returnerships’, and operate alongside skills boot camps and sector-based work academies.
‘They will bring together our existing skills programmes to make them more appealing for older workers, focusing on flexibility and previous experience to reduce training length.’
Childcare
As part of the Chancellor’s plans to get more people back to work he announced 30 hours of free childcare for all under-fives from the moment maternity care ends, where eligible.
He told the Commons: ‘I today announce that in eligible households where all adults are working at least 16 hours, we will introduce 30 hours of free childcare not just for three- and four-year-olds, but for every single child over the age of nine months.
‘The 30 hours offer will now start from the moment maternity or paternity leave ends. It’s a package worth on average £6,500 every year for a family with a two-year-old child using 35 hours of childcare every week and reduces their childcare costs by nearly 60 per cent.
‘Because it is such a large reform, we will introduce it in stages to ensure there is enough supply in the market.’
Energy
The government has said the Energy Price Guarantee will remain ar £2,500 until June, saying this will save the average household £160 on bills. However, the energy support scheme will still end in March, with homes longer receiving £66 a month automatically off their bills.
The Chancellor said he would take both short and long-term measures to reduce the costs of energy for businesses.
Hunt said: ‘I will extend the Climate Change Agreement scheme for two years to allow eligible businesses £600 million of tax relief on energy efficiency measures. But the long-term solution is not subsidy but security.
‘That means investing in domestic sources of energy that fall outside Putin or any autocrat’s control. We are world leaders in renewable energy so today I want to develop another plank of our green economy, Carbon Capture Usage and Storage (CCUS).’
Tax incentives
A three-year policy of ‘full expensing’ for businesses will mean every pound a company invests in IT equipment, plant or machinery can be deducted ‘in full and immediately’ from taxable profits, a move worth £9bn a year, the Chancellor said.
EVs & car charging
Electric cars didn’t get a mention in the chancellors speech, despite many calls for further support.
It was also expected that new commercial property would now have to install electric car chargers.
There have been lots of calls for incentives to get more buyers into both new and used electric vehicles, but so far there is no confirmation that this will get a mention in the chancellors spring budget.
Electrifying has called for a used EV loan, with founder and CEO Ginny Buckley saying: ‘With the number of used electric cars coming to the market expected to soar over the coming months and prices falling, there has never been a better time to buy.
‘But while there are incentives to make new electric cars more affordable through company car and salary sacrifice schemes, there is currently no financial help outside of Scotland to help used car buyers.
‘What we need is policies in place to make sure everyone has access to zero-emission vehicles; a used electric vehicle loan would do just this, making the switch equitable for all and not just the middle classes.’
Investment zones
Cities were anticipating an announcement of several investment zones across the country, back by £80m in funding over five years, tax incentives to improve skills, provide business support and improve planning or local infrastructure.
These are planned to drive growth across five sectors; life sciences, creative industries, digital technology, advanced manufacturing and green industries.
The chancellor said the government would deliver 12 new investment zones, which he labelled ‘12 potential Canary Wharfs’.
He said: ‘In England we have identified the following areas as having the potential to host one: West Midlands, Greater Manchester, the North East, South Yorkshire, West Yorkshire, East Midlands, Teesside and, once again, Liverpool.
‘There will also be at least one in each of Scotland, Wales and Northern Ireland.’
Road repairs
The chancellor has announced £200m in funding to tackle potholes in UK roads. Hunt spoke to the Daily Mail earlier in the week and it’s expected this 20 per cent boost in funding will be given to councils for them to spend on residential streets initially.
RAC head of roads policy Nicholas Lyes said: ‘While welcome, another £200m is unlikely to make a big difference to the overall quality of our dilapidated local roads.
‘We need to significantly increase funding for local road maintenance and improvement so councils can resurface roads properly rather than patching them up and hoping for the best.
‘Last year the government spent £1.125bn on local roads in England which is in stark contrast to the £7bn that went into major roads from car tax, despite local roads covering so many more miles.’
