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Diesel in the spotlight

Written by | Posted on 07.04.2017
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It’s been quite a week for diesel. It all began with an article in The Sunday Times, which declared that Diesel drivers face “toxin taxes” of up to £20 a day in 35 towns and cities across England’. The measure, it said, is due to be announced next week by the Environment Secretary, Andrea Leadsom, as part of the Government’s new Air Quality Plan.

Air Quality Plan

In November, the High Court ordered the Department for the Environment, Food and Rural Affairs (Defra) to publish a revised draft of its Air Quality Plan by 24th April, after ClientEarth successfully argued that the previous version didn’t do enough to tackle pollution.

Under the revised plans, according to the Sunday Times article, ‘a network of “clean air zones” will be set up, with councils mandated to impose bans or charges on polluting vehicles that enter them.’

Plans under fire

Even before the Environment Secretary got the chance to announce the policy, the toxin tax came under fire from tabloids such as The Sun newspaper and the campaign group FairFuelUK causing the Prime Minister, Theresa May, to offer her reassurance:

I’m very conscious of the fact that past governments have encouraged people to buy diesel cars..and we need to take that into account when we look at what we do in the future.

Scrappage scheme

The Sun newspaper has taken the reassurance to mean that the Government will abandon plans for a toxin tax entirely ‘Theresa May orders ministers not to punish millions of diesel drivers with “Toxin Tax”,’  Other interpretations have been more cautious, however.

The BBC article ‘PM hints at help for diesel car owners over “toxin tax’ speculated that it could take the form of a scrappage scheme that offers diesel owners money towards newer, cleaner vehicles.

Such a scheme was considered for inclusion in Philip Hammond’s Spring Budget last month, but the Chancellor reportedly decided that its cost was too high. If the Government does go ahead with a toxin tax, Hammond may be forced to reconsider.

ULEZ date confirmed

Either way, we’ll have to wait at least until next week to discover what the Government will do –  but we don’t have to wait to discover what Sadiq Khan has planned for diesels in the capital. The Mayor of London confirmed on Tuesday that he will introduce a £10-a-day ‘T-Charge’ in October this year, before turning Central London into an Ultra-Low Emission Zone (ULEZ) as of 8th April 2019.

The T-Charge will apply to diesels that do not meet Euro 6 emission standards – mostly those built before 2006. They will have to pay an extra £10-a-day fee to drive in the congestion charge zone, rising to £12.50-a-day once the ULEZ comes into force.

Taxation reforms for diesels

As if all this wasn’t enough change for motorists to get to grips with, there’s also the looming possibility of reforms to the taxation of diesel vehicles. As we reported in our guide to the Spring Budget, Hammond announced:

The government will continue to explore the appropriate tax treatment for diesel vehicles, and will engage with stakeholders ahead of making any tax changes at Autumn Budget 2017.

We’re still waiting for any proposals to emerge, but they may include higher Vehicle Excise Duty rates for diesel cars, similar to the ‘diesel supplement’ added to Company Car Tax.

Rise in popularity of ULEVs

According to new figures from the Society for Motor Manufacturers, diesels accounted for just 43% of all new cars registered in the first three months of 2017 – down from 50% in 2014. Meanwhile, registrations of Ultra-Low Emission Vehicles (ULEVs) have increased by 550% in the last three years.

Now more than ever, fleets and motorists should be asking whether electric or hybrid vehicles are right for them – you can read more in our latest whitepaper on ULEVs here.

 


 

For further information please speak to your LeasePlan Account Manager.

If you aren’t a customer and want to find out more, please contact our Consultancy Services Team by calling 01753 802 000 or emailing ConsultancyServices@leaseplan.co.uk

 

 

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