Spring statement 2025: should drivers be worried about the budget?

The government’s annual Spring statement is just around the corner and there’s been rather a lot of speculation about what might be in store for drivers.

Yet, while several media outlets could be accused of fear-mongering, we here at Auto Express believe we’re in a position to calm your nerves. There has been very little to indicate anything new will be announced next week in the Commons that will affect drivers – in a motoring sense, that is.

Nevertheless, several automotive announcements have been made over the last few months that may well be mentioned within Chancellor Rachel Reeves’ speech and are set to come into force very soon. Let’s look at what could be in the red box…

VED (road tax) changes

As per Reeves’ announcement in last year’s Autumn Budget, VED (also known as road tax) is set to rise this April from £190 annually to £195 – the first-year VED rate will also rise for the lowest-emission cars as the bottom tax bracket has been scrapped.

Most notable, however, is that electric cars are now no longer exempt from road tax and, given many cost over £40,000, there will now be a lot more EV drivers paying the annual expensive car tax supplement, which sits at £425 per year from April. Adding insult to injury for economy-minded motorists, hybrid and mild-hybrid cars will also no longer qualify for the £10 discount in yearly road tax.

Fuel duty freeze

In October, the government announced that it would extend the ongoing freeze to fuel duty, as well as the temporary five pence cut, until March 2026 – despite many rumours suggesting the contrary. However, there is nothing to say that Labour won’t unfreeze duty and remove the cut at this year’s Budget.

On the topic of fuel, the government is set to (finally) launch its Fuel Finder app before the end of the year, allowing drivers to compare live fuel pricing in order to make an informed decision on where to fill up.

ZEV mandate consultation

While this almost certainly won’t be covered by Reeves in her Spring statement, the government is set to imminently publish its review into the controversial ZEV mandate which has seen manufacturers shell out billions of pounds in order to shift expensive electric cars to buyers and thus avoid tough fines.

Nothing specific has been said on what’s going to be announced, but Ford UK’s CEO Lisa Bradkin did tell Auto Express that the firm has had “really good engagement” with the government over the mandate. 

The Society of Motor Manufacturers and Traders have called for government incentives for private buyers purchasing new EVs and a cut to VAT on public charging (to more closely match the price of domestic electricity), among other things.

Support for UK automotive manufacturing?

There has been some speculation around whether the government might announce any measures to support the nation’s car manufacturing industry. This has taken huge hits of late after Stellantis, owner of Vauxhall, pulled the plug on its site in Luton. 

With other firms threatening to pull out of the UK, the government could well try to offer greater support. However, it’s most likely that if anything was announced, this would be part of a greater package resulting from the above ZEV mandate consultation changes and any “support” could be limited to incentives and VAT cuts for EV buyers.

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