Here’s how Labour’s General Election win will impression drivers

We have a new Labour government – and with it, motorists will want to know what it means for the future of car ownership and driving costs. 

What should motorists taking to the road under a Kier Starmer led government expect once the dust settles?

We have pulled together all the ways a Labour government will impact drivers, from restating the 2030 ban on sales of new petrol and diesel cars to hiking fuel duty.

Will there be an increase in fuel prices under Labour?

Sir Keir Starmer has refused to entirely rule out a fuel duty increase.

Having remained frozen for 14 consecutive years, the Labour leader has been reluctant to say he will continue this decade-and-a-half trend.

Britons face some of the highest fuel taxations across Europe – with VAT of 20 per cent also charged on top of the full price including duty. Since 2011, it has been frozen at 59.95p per litre. 

An additional ‘temporary’ 5p cut on the fuel tax, which was first introduced in March 2022 by then-Chancellor Rishi Sunak in a bid to neutralise escalating pump prices triggered by the outbreak of war in Ukraine, is also in place until March 2025.

During the Sky News’ leader debate Starmer avoided directly answering whether a Labour Government would increase fuel duty. 

When pressed on the fuel duty for a second time he reverted to his track record on the matter. 

Starmer said he’d supported a freeze ‘every single time it has come up’ but that ‘fuel duty will have to be decided budget by budget’.

Leading up to the election, Shadow Secretary of State for Transport Louise Hague told Auto Express: ‘On fuel duty – we want lower taxes on working people, which is why we’ve always campaigned against fuel duty rises in this Parliament. 

‘Nothing in our plans requires us to raise any additional money beyond measures already announced.’

Hague also said Labour would explore options to address how fundamentally unfair it is that crude oil price drops are not passed on as savings to drivers.

Based on the outgoing Conservative Government’s plans, the 5p fuel duty is due to end in March 2025 and then increase by retail price index (RPI) inflation from April 2025, and every year thereafter. 

This was also the case in the previous decade but freezes were confirmed by the various Chancellors of the Exchequer.

A driver saves around £50 a year with the retained fuel duty cut – with total savings of around £250 since it was first introduced, according to the Treasury.

When will you have to switch to an EV?

Labour has always been clear that it will restore the 2030 phase-out date for new petrol and diesel cars, which it says will help bring certainty to manufacturers after the Conservatives pushed it back to 2035.

Motorists are concerned that switching to electric will be unaffordable. 

New EVs tend to be a fair bit pricier than new petrol and diesel cars, and Auto Trader recently reported a lack of cheap used EVs is slowing down the switch.

However, Labour told Auto Express: ‘Electric cars are already cheaper to run and will soon be cheaper to make than petrol cars. More delay means higher costs for drivers, billions in investment lost and more jobs shipped overseas.’

There are cheaper new EVs entering the market, with the bargain Dacia Spring and Citroen e-C3 both launching this year. The Spring will cost from just £14,995 and the e-C3 from £21,990.

And the AA Used Car Index has just found that the average prices of the UK’s most popular used electric and hybrid vehicles slumped by nearly a fifth (19 per cent) in the three months to June compared with the same period last year.

However, Labour hasn’t offered any direct incentives to help people budget for an EV, instead leaving the role to market forces and offering chargepoint improvement as an incentive instead.

Will the EV switch be supported by cheaper charging?

Labour’s promised to expand the charging network with a host of rollout improvements.

The party will remove barriers to chargepoint rollout such as height restrictions and data access restrictions. The £950million Rapid Charging Fund will also be released.

Whether Labour will reduce VAT on public charging from 20 to 5 per cent if the party gets into 10 Downing Street – which would bring VAT in-line with home charging and remove this charging inequality – remains to be seen, but that would bring greater savings to EV drivers.

Potholes: will the roads be fixed?

In January This is Money reported that, in 2023 damage to vehicles caused by Britain’s pothole-blighted roads cost a staggering £474,000,000.

Labour’s number crunching puts the average repair charge is £250.

To solve this Labour says it will ‘maintain and renew our road network’ by fixing an additional one million potholes across England each year of the next parliament. And it’s promised an end to the ‘sticking plaster approach’ to repairs.

Labour plans to put in an additional £320m over five years – funded by deferring the planned A27 Arundel bypass – which will top up the £8.3bn already promised by the Tories.

Will ULEZ expand making more drivers pay?

It seems Labour will not be expanding low or ultra-low emission zones. ULEZ costs £12.50 a day and covers all London boroughs.

Neither were mentioned in the Labour manifesto and there have been no plans announced during the campaign trial.

Congestion Charge also wasn’t mentioned, but Labour Mayor of London, Sadiq Khan will make EVs pay £15 Congestion Charge from 25 December 2025. 

Car insurance – will it finally be affordable again?

Long-suffering motorists now paying an eye-watering £635 for cover – a record high and a rise from £627 in the final three months of 2023, the Association of British Insurers (ABI) said.

Labour has said it ‘will further support drivers by tackling the soaring cost of car insurance’ but didn’t go into further detail in its manifesto.

At the Labour Party conference last year, Shadow Transport Secretary Louise Haigh said the Financial Conduct Authority and the Competition and Markets Authority would be instructed to launch formal investigations into the soaring price of car insurance.

Haigh confirmed the 14-day free cancellation car insurance window would be extended, and unfair postcode pricing would be looked into.

Labour’s also said the plan to fix potholes will save drivers ‘hundreds of pounds in lower repair bills and insurance premiums’.