Diesel drivers face Budget tax hike

Diesel drivers face Budget tax hike
Diesel drivers face Budget tax hike

Owners of diesel vehicles look set to be hit with higher taxes when Chancellor Philip Hammond announces his Budget next week.

Government aides have hinted that Mr Hammond has decided higher taxes on diesel vehicles are the best way to fund the Government’s Clean Air Strategy, according to the Financial Times.

“It is ridiculous to further demonise diesel via differential taxes when drivers are already voting with their wheels”

Edmund King, The AA

The Government has already pledged to stop the sale of new diesel and petrol vehicles by 2040 as it moves to reduce traffic-related air pollution. While petrol engines produce more CO2, diesel are responsible for more of the harmful NOx and small particulate pollution.

It is not know whether the new charges will be an all-new levy, an increase to VAT on new diesel sales or changes to the vehicle excise duty (VED).

It has been suggested that a change to VED could affect those who already own diesels as well as those buying new diesel cars. The Telegraph has reported that Environment Secretary Michael Gove is pushing for anyone who lives in a high-emissions area and buys a second-hand diesel car to be hit with an extra charge.

Another alternative reportedly being considered is raising fuel duty on diesel and/or reducing it on petrol to widen the gap in fuel costs and promote petrol over diesel.

Responding to the reports, motoring organisations have warned that any sudden increase would be a “knee-jerk” move that could be counterproductive.

Grossly unfair

RAC chief engineer David Bizley said: “We are concerned that those who drive long distances, business drivers especially, might consider sticking with their older diesels given the superior economy they offer. It would be a terrible misjudged ‘knee-jerk’ reaction which could backfire and have the unexpected effect of encouraging these owners of older diesels and fleets not to upgrade to newer, cleaner diesels which offer significant benefits in reduced emissions.

“This isn’t what the Government, or any of us, want and is the opposite of what is needed from an air quality perspective. However, it would also be grossly unfair to penalise owners of current diesel vehicles.

“The irony is that the next generation of diesel engines which manufacturers are developing right now are likely to be as clean as their petrol equivalents – so while a new tax might be logical in the short term, this logic will likely not apply within a year or so.”

Edmund King, president of the AA added that drivers were already moving away from diesel and the Government should be incentivising alternative fuels rather than demonising diesel.

He said: “It is ridiculous to further demonise diesel via differential taxes when drivers are already voting with their wheels,’ he said.

“Some 41 per cent of AA members own diesels but that drops to 16 per cent when drivers are asked what fuel their next car will run on.

“Indeed in October diesel sales were already down 29.9 per cent compared to last year.

“The Treasury should concentrate on incentives for greener cars rather than hitting diesel.”

Sales of diesel cars have fallen dramatically this year. Figures from the Society of Motor Manufacturers and Traders show that in October they were 30 per cent down on 2016 and overall this year new registrations of diesel cars are 15 per cent down on last year.

 

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