It also asked the Chancellor, Jeremy Hunt, to implement a cut in insurance premium tax (IPT) by 25% for all motorists, to help drive down the cost of cover.
The motoring service called for that reduction to rise to 50% for younger drivers due to the “disproportionally” higher premiums they’re usually charged.
Meanwhile, for greener vehicles, it requested a drop in VAT for on-street EV charging from 20% to 5%. As well as lower costs to charge them, the AA asked the Treasury to keep the vehicle excise duty lower than petrol and diesel cars once that duty is introduced to EVs after 2025.
Another proposal was for more cash to be invested into publicly available charging points for EV drivers. The AA hopes this will change the opinion it feels many UK motorists have about there being a lack of places to charge EVs on the nation’s roads.
In its letter to the Treasury, the AA also suggested a new programme to promote more workers in the automotive repair sector.
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The AA’s CEO, Jakob Pfaudler, said: “The creation of a new Skills Funding Agency would help drivers in the years to come. Investing in school and college students in this exciting sector will help keep people on the road and instep with vehicle technology.”
Rumours are abound as to what will be announced in next week’s Budget, and one policy up in the air is the current freeze on fuel duty. Fuel duty has been priced at 57.95p per litre since March 2022, and the assumed inflation increase was cancelled in 2023. However, in his November Budget announcement, Jeremy Hunt confirmed the freeze would only remain up until March 2024.
Ahead of the Chancellor’s announcement, prices at the pump have crept up, rising by 3p per litre in the three weeks up until 18 February.
Jakob Pfaudler hopes the Government seizes his Budget “to give confidence to drivers now, and for the future” before the general election.
He said: “To help households tackle the cost-of-living crisis, maintaining the freeze in fuel duty and equalising VAT for on-street EV charging to match domestic energy rates would be a great first step. Similarly, help to make the cost of compulsory insurance more affordable, especially for younger drivers, would be well-received.”
