Reports: Chancellor to raise diesel taxes in Autumn Budget

Chancellor Philip Hammond will raise taxes for diesel vehicles in the upcoming Autumn Budget in an attempt to boost the uptake of low-carbon alternatives, according to media reports.

The Financial Times has reported that the Chancellor believes that diesel tax hikes are the best route to meet the objectives of the Government’s air quality plan, which sets out to meet air quality standards within the shortest time possible.

A draft plan released this summer revealed proposals to ban all new petrol and diesel vehicles by 2040.

Over the last 15 years, a variety of policy and tax enablers have seen diesel car sales in Britain increase from 14% to 36%. But research shows that these diesel vehicles are now responsible for almost 40% of all NO2 emissions in the UK’s major cities.

It is not known whether the Chancellor will choose to increase VAT in sales or create a new levy in his Autumn Statement on 22 November. 

Green organisation Friends of the Earth said it was right for the Chancellor to remove incentives for polluting diesel vehicles.

“Diesel vehicles cause unacceptable damage to people’s health, and for too long tax breaks on diesels have encouraged people to keep buying them,” Friends of the Earth clean air campaigner Oliver Hayes said.

“Car companies are irresponsibly clinging to the lie that diesel is ‘clean’, in a desperate bid to shift vast stocks of a toxic product consumers are rightly turning away from.”

Hayes called on the Chancellor to go a step further by announcing a clean air fund that could help implement clean air zones in the most polluted UK towns and cities.

Changing market

Diesel vehicles have been under the spotlight in the two years since German manufacturer VW was embroiled in a scandal for equipping its models with defeat devices that enabled them to appear to be much less polluting than in reality.

The industry has been dealt a blow in recent times with plummeting sales figures, with statistics released this week showing that around 29.9% less diesel vehicles were sold in October 2017 than in the same month last year.

The demand for low-carbon vehicles, on the other hand, has grown dramatically. Sales and registrations of Ultra-Low Emission Vehicles (ULEVs) in the UK have grown by more than 1,800% since 2011, according to the latest Government figures.

The data highlights the increased variety of vehicles on offer, as high-profile manufacturers pledge to electrify their portfolios. In the last few months, VolvoJaguar Land Rover and Volkswagen all unveiled EV initiatives.

This growth is likely to surge over the coming years. The Government’s Clean Growth Strategy will provide a £1bn support scheme for ultra-low emissions vehicles – including discounts on upfront costs on the purchase of an EV.

George Ogleby

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