2023 spring budget: fuel duty cut, £200m to repair potholes

The UK government has frozen its 5p fuel duty cut, initially introduced last year, in a decision which has been welcomed by key players in the country’s automotive industry. 

Announced by chancellor Jeremy Hunt as part of his 2023 spring budget, the cut will remain at 5p for an additional twelve months, which Hunt says will save drivers £100 a year, and £200 since the cut was first introduced. 

"As inflation remains high, I have decided now is not the time to up fuel duty in line with inflation, or increase the duty," he told MPs this afternoon.

He added the decision was made after hearing what impact the government's planned 11p duty rise would have had on motorists.

The RAC welcomed the extension of the cut, which would keep duty frozen at 52.95p per litre, saying the decision would support drivers and fight inflation. 

“We welcome the Government’s decision to keep the 5p fuel duty cut in place for another 12 months. The cut has given drivers some much-needed relief in what has been the most torrid year ever at the pumps, with price records being broken even after duty was cut,” said Nicholas Lyes, the RAC’s head of roads policy.

“Given the importance of driving for consumers and businesses, duty should be kept low to help fight inflation.”

The AA concurred, stating the freeze would help millions of drivers. 

“We are pleased the Chancellor has listened to the AA and frozen fuel duty," said Jack Cousens, the AA’s head of roads policy. "Not only will this save drivers ‘heavy-duty’ pain at the pump, but will help keep the price of goods and services down as they are mainly transported by road. Crippling road fuel costs are also a major driver of inflation.”

Hunt also announced an additional £200 million investment which will go towards repairing potholes on UK roads. It increases the total fund to fix potholes up to £700 million. 

The RAC said the funding for potholes was necessary, but added that it would not go far enough to improve the condition of roads across the country. 

“While welcome, another £200m is unlikely to make a big difference to the overall quality of our dilapidated local roads," said Nicholas Lyes, RAC head of roads policy. 

“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.”