Budget could see tax rises for diesels, despite sales fall

 

Press reports say chancellor Philip Hammond is planning to put higher taxes on new diesel vehicles in this month’s Budget to tackle toxic air pollution.

It follows statistics published earlier this week showing sales of diesel cars falling by 30% in October, compared with the same month last year.

The Financial Times said ministers have been weighing up whether to raise taxes to fund new air quality initiatives or to find the additional cash through cuts elsewhere.

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The paper quoted Government aides as saying that Mr Hammond has decided that tax increases on diesel cars are the best option but said it is not yet clear whether he will increase VAT on diesel sales or create a new levy.

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.

‘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.’

Simon Alcock, head of public affairs at campaign group ClientEarth, said the Budget would be ‘a litmus test of the Government’s resolve to clean up our dirty air’ but warned that any reforms would need to be based on real world emissions ‘as only 10% of modern diesel cars meet emission limits on the road’.

He said: ‘The illegal levels of air pollution in towns and cities across this country are down in large part to diesel vehicles. It’s perverse that our tax system encourages people to buy the most polluting vehicles.’

 

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