The Government will increase taxes on new diesel cars in order to fund its air quality plans, which culminate in ban on internal combustion-engined cars from 2040 unless other existing funds can be ‘reprioritised’.
The funds will be dished out to local authorities, for more local air quality measures such as the proposed abolishment of speed humps and air quality-decreasing traffic calming measures. The ban, which will abolish sales of all new petrol and diesel cars (but not hybrids or plug-in hybrids) is the culmination of a period of intensifying anti-fossil-fuel and pro-air-quality rhetoric.
It’s not yet known how much the taxes would amount to for each diesel driver, but they would be in addition to the £10 T-Charge, which was announced earlier this year to discourage diesel drivers from already polluted city centres, as well as other levies to discourage drivers out of diesels. The current method of taxation for covers both petrol and diesel cars, with first-year charges ranging from £10 to £2000 depending on the car's CO2 output. After this, all cars have the same £140 rate of tax, whatever their emissions. Zero-emissions cars under £40,000 go free.
The Government will announce the measures later this year, likely in the autumn budget statement. The detail has fuelled further speculation of the end of diesels in the UK, from used car buyers ditching them in the wake of higher taxes and charges, as well as through the Government’s planned scrappage scheme, and new buyers snubbing them in favour of Lexus petrol, petrol-electric hybrids and pure EVs.
This tax hike would be another blow for the Government’s latest VED scheme. These new VED rules have already faced criticism for inadvertently penalising more expensive hybrids out of contention with traditional petrol and diesel cars through a £310 annual ‘premium fee’ for cars with a list price of more than £40,000 for the first five years of the car's life, no matter what its emissions.
A Defra spokesman confirmed that the tax changes will be announced at the autumn budget statement, but could not give any further details.
An AA spokesman said: “Something has to be done about air quality, but there is tunnel vision when it comes to the problem; cars, cars, cars are always blamed, without a grand strategy for the other sources which make up the majority of air pollution.
We believe there is a natural route to where the government wants to get - once again they have whipped up a storm of fear and can milk it for as much as you can get out of it.
One of the reasons people went to diesels is that they’re cheaper in the long run. The lack of affordable housing in city centres means longer commutes, which means a diesel car will be more suited to your commute. The average fuel consumption for new cars is 52.1mpg for petrol, 61.7mpg for diesel - go figure.”
The spokesman also remarked about the UK moving away from pay-per-mile-type car taxation, suggesting that a revision to the current VED laws will be in store for diesels, rather than a new taxation system entirely.
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