So now we know. After promising to deliver cleaner air throughout his campaign for London’s Mayoralty, Sadiq Khan has just revealed his plans for reducing diesel emissions. They involve the Ultra-Low Emission Zone that was set up by his predecessor: it will now be introduced one year earlier, in 2019, and then be extended beyond central London. But there are also some brand-new policies: from next year, an ‘Emissions Surcharge’ of £10 will be imposed on older, dirtier vehicles travelling through the city centre, in addition to the usual Congestion Charge.
Normally, we’d point you to the Mayor of London’s website for more information. But today we have a better source, LeasePlan Consultancy Services’ Diesel Briefing – a guide to what’s being said and done about diesel vehicles.
We decided to produce this document to help our customers at a time when diesel is under question. It didn’t begin with the Supreme Court’s ruling on air pollution last year, but that definitely gave the issue extra prominence. They called on politicians to produce a plan for reducing nitrogen dioxide (NO2) emissions, which have been in breach of European Union standards for six years running. And NO2 happens to be a by-product of diesel engines in particular.
Policies
London’s legislators are trying to meet this demand, but what about our national ones? Their most noticeable policy, particularly for us in the leasing industry, has been the extension of their diesel surcharge. This 3 percentage-point addition to the rates of Company Car Tax (CCT) paid by diesel motorists was meant to be phased out at the beginning of April. Instead, in his most recent Autumn Statement, George Osborne revealed that it will remain for another five years.
This abrupt decision has burdened motorists with costs that they didn’t expect. It is a bad way of doing policy. But, thankfully, not all of the Government’s measures have been like this. Their support for ultra-low emission zones around the country is an admirable way of encouraging people to choose cleaner cars. In fact, it’s so admirable that, as Parliament’s Environment, Food and Rural Affairs Committee recently suggested, it should probably be extended more quickly.
Taxation
Aside from these policies, the Government has not yet done as much as we might have expected. There was speculation that the entire system of CCT could be based on NO2 emissions instead of, as it currently is, carbon dioxide (CO2) emissions. Yet, in his latest Budget, the Chancellor confirmed that CO2 will remain the determinant of tax rates from now until 2021 and beyond.
But could bigger policies be on the way? It’s difficult to make any predictions about politics at the moment, so we’ll just say… perhaps. In a recent interview, the Transport Secretary Patrick McLoughlin suggested that previous governments had, in hindsight, been wrong to incentivise the purchase of diesel vehicles. He said: “It is something the Chancellor will need to look at in due course.”
Summary
LeasePlan is here to help its customers prepare for the possibilities, which is why our consultancy team has produced this briefing document. It isn’t meant to be a comprehensive account of everything that is going on in the world of diesel policy, but it does summarise what many of the main participants are saying and doing – from the Government itself to various industry bodies and think-tanks. It will enable fleet managers to make more informed decisions.
So much is in flux at the moment, whether it’s new car technologies, attitudes towards CO2 and NO2, or even the composition of our political class. And we see it as our responsibility to provide as much clarity as we can.
Download a copy of the LeasePlan Consultancy Services Diesel Briefing document here:
LPCS Diesel Briefing July 2016 New
