Reaction to the Spring Statement by the Chancellor

On 26th March 2025 the Rt Hon Rachel Reeves delivered her first Spring Statement to the House of Parliament, below is the Automotive Aftermarket reaction, this will be updated as more comes in so keep checking back.

Ben Coates, Editor of Garage Talk, said: “Last year, the Chancellor urged businesses to invest. Yet, over the past nine months, Labour has continually cost companies significant amounts of money, leaving them with little room to invest or create the funds needed for investment, forcing them to cut jobs.

Many business owners are poorly paid for the hours they work, yet they are the ones bearing the brunt of what Labour is trying to achieve. The famous saying that workers are now better paid will soon turn into the reality that unemployment is rising due to these plans being unaffordable, and business owners are having to make tough decisions.

The Chancellor's nickname, 'Rachel from accounts,' isn’t fair on accountants, because accountants wouldn’t make such poor decisions.”

Point S Managing Director Ali Yilmaz commented: "With recent increases in vehicle excise duty and the Chancellor's decision not to halve VAT on new EV purchases, we anticipate motorists will keep their existing ICE vehicles for longer, creating several opportunities for aftermarket businesses. We're already witnessing hesitation in the new car market with a three percent contraction across Europe as uncertain consumers postpone vehicle purchases.

"This trend, combined with no additional funding for pothole and road repairs, means the UK car parc will continue to age and experience greater wear and tear. However, with household budgets remaining tight, independent aftermarket businesses must demonstrate to customers the value of investing in preventative maintenance and repairs for their safety and that of other road users."

Iain Reid, Head of Editorial at Carwow said: “With public finances under pressure, it’s clear the Government wasn't in a position to offer any big-ticket incentives for motorists - especially when it comes to buying more electric vehicles.

“We know from our own data that consumer interest in EVs is growing, as evidenced by the 87% increase in EV enquiries on Carwow this February, compared to the same month in 2024. We were hopeful that today's budget would provide motorists with some incentive to buy and help convert this increased interest into actual sales.

“There is a simple move that could have helped get more drivers into EVs: scrap the looming ‘expensive car supplement’ for electric models. From 1 April, EVs with a list price over £40,000 will be hit with an extra £410 a year in road tax. This undermines the in-life savings that make EVs attractive and risks pushing drivers towards cheaper petrol models instead - making it even harder for the Government to achieve its own net-zero ambitions.

“Unfortunately, dealers have no influence over that £40,000 threshold. This ‘luxury car tax’ is based on the vehicle price when new, so no amount of dealer discounts or offers will impact whether a consumer has to pay it or not.

“It's a huge oversight that this unnecessary tax was not addressed by Mrs Reeves in her statement today; scrapping it would doubtless attract more people into EVs – supporting both our national adoption goals and the UK’s automotive sector.”

Rachel Clift, Chief Executive Officer at Ben, the automotive industry charity, said:

“The recent Spring Statement announces tighter public funding with £5bn in welfare cuts and the abolition of NHS England.

“As a health & wellbeing charity, we have concerns about the abolition of NHS England. What isn’t clear is the government’s plan to fill the gap in the current role of NHS England which strives to provide high-quality healthcare for all. We will be keeping a watchful eye on this announcement, as this could affect NHS services and continue to increase what is already a bleak picture of health inequalities in the UK.

“The Government’s proposed budget cuts to welfare and disability benefits is likely to be worrying for those who rely on this support as it could have a significant impact on their life, and, in turn, their health and wellbeing.”