Drivers have been hit with a double blow of car tax rises and higher fuel costs – but there is one thing Rachel Reeves can do, writes Cars Reporter Luke Chillingsworth.
Rachel Reeves is hitting drivers with tax hikes when she should be cutting costs. (Image: Getty)
Rachel Reeves has hit drivers with new car tax fees at the worst possible time. The Chancellor should be cutting fees instead of adding more to bills. Motorists across the UK must have that sick sinking feeling as the cost of vehicle ownership ballooned around them week after week without respite.
Earlier this month, unleaded petrol prices had increased by an eye-watering 25.3p per litre since the end of February amid the crisis in the Middle East. Diesel fees were even higher, with costs soaring 49.2p per litre as average bills exceeded £100 per top-up.
The motor industry is calling for a reduction in VAT charges on fuel. (Image: Getty)
If that wasn’t enough to digest, road users are also stomaching Reeves’ latest tax raid, with Vehicle Excise Duty (VED) charges up across the board in April. Brand new car owners are facing bills of up to £5,690 per year, with older cars registered between 2001 and 2017 paying as much as £790 to use the roads.
Even van owners, the bedrock of small businesses, are in the firing line with bills of up to £360 per year. Drivers are paying more than ever for the privilege just to sit on Britain’s pothole-ridden roads, then getting screwed again at the fuel pumps just to finish their journey.
Labour called out fuel retailers for profiteering, while Reeves’ Treasury was pocketing millions of extra revenue. Data from the RAC Foundation revealed that more than £100 million in additional VAT on petrol and diesel purchases has now gone to the Exchequer between February 28 and April 1.
Once again, Labour have ignored its own motor industry, with the Petrol Retailers Association (PRA) demanding officials intervene with immediate short-term cuts. PetrolPrices explained that a temporary VAT cut would offer relief for cash-strapped drivers, as Carwow urged ministers to return some of the extra tax take back to drivers’ pockets.
Fuel costs soared between the end of February and April. (Image: Getty)
Van owners have been hit with new £360 VED car tax bills. (Image: Getty)
Even Labour’s political rivals, the Liberal Democrats included, called for urgent VAT reductions on fuel. Labour refused to act at the Spring Statement, rejecting calls for action at the pumps as motorists queued at forecourts in their droves.
Keir Starmer could have U-turned at the start of April as he outlined a five-point plan for the immediate crisis. But once again, no action was taken, with the Prime Minister reminding road users that fuel duty is only cut until September, when it will rise.
Even if Labour announced sweeping measures to cut VAT rates today, it’s already too late. The worst of the fuel crisis seems to be over, with petrol and diesel costs already on the way down. Prices should have been cut weeks ago. What have they been waiting for?