Rachel Reeves has cut car tax to a nominal £1 charge for thousands of drivers in a massive boost. Hauliers are set to get a 12-month road tax holiday saving up to £912 per vehicle.
The Labour Party Chancellor has also ensured red diesel is slashed to its lowest rate in over 20 years until the end of the year. The move from Ms Reeves comes as the Chancellor 'keeps taxes down for drivers after strong growth at the start of the year, showing government has right economic plan,' the government website has stated.
Ms Reeves has been forced to act amid the ongoing uncertainty sparked by the Iran war between the United States of America and Iran. The conflict in the Gulf has sparked the closure of the Strait of Hormuz and has hit motorists hard in the pocket.
Support for Hauliers
In a government press release, the Department for Transport said the war in the Gulf 'has also pushed up costs for hauliers who keep Britain’s shelves stocked and its economy moving.' As such, the DfT promised the Chancellor is giving them a 12-month road tax holiday – meaning they will pay £1 at renewal. It will save £600 for a typical heavy lorry and £912 for the biggest vehicles on the road, the figures show.
Red Diesel Cuts
Farmers, rail freight, and other red diesel users will also see their fuel duty cut by over a third until the end of the year. This is the lowest rate in over 20 years, helping to keep the cost of doing business down at a difficult time when red diesel prices are around 50% more than their pre-crisis levels.
Since the start of the Iran conflict, the government has been clear that it will not make kneejerk decisions that could impact on financial stability. The package of support brought forward is timely and targeted.
