Diesel tax hike considered by UK government

Diesel drivers could face rising taxes as the government considers reversing fuel duty cuts introduced in 2001.

Speaking to the London Evening Standard, transport secretary Patrick McLoughlin said reversing the tax breaks is “something the chancellor will need to look at in due course”.

Reduced rates of company car tax for diesel cars are also likely to be targeted. Both this and the reduced diesel fuel duty were introduced to encourage drivers into diesels for their lower CO2 emissions.

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“In fairness they [the government at the time] thought they were doing the right thing. The consequences of what they did was to bring about a reduction in carbon,” McLoughlin said.

In recent times, the ongoing emissions scandal has brought the negative effects of NOx emissions into the public eye. The tax breaks, which were introduced by Gordon Brown and helped to bolster diesel sales considerably, are now being recognised by MPs as a mistake, given the harmful properties of NOx, even with the reduced CO2 levels taken into consideration.

Despite experts forecasting a sharp decline in the sales of diesel cars following the emissions scandal, the most recent set of industry figures revealed a 5% growth in diesel sales.

A spokesperson for the Society of Motor Manufacturers and Traders (SMMT) couldn’t speculate on what effect the raised costs may have on sales of diesel cars. However, Tamzen Isacsson, SMMT director of communications and international, said: “Demand for diesel cars in the UK remains very strong, with registrations in May up 5% - ahead of the overall market’s growth.

"British consumers still favour the latest diesel vehicles for their efficiency, performance and lower CO2 emissions, and the latest Euro 6 technology is helping to significantly reduce emissions.”

London mayor Sadiq Khan is also said to be looking at an additional charge in central London for cars, vans and lorries that contribute to pollution levels in the city centre.

Government consideration of tax rises follows calls from industry groups for a halt to diesel tax breaks and the introduction of charges for diesel drivers. However, it’s still unknown just how far the measures will go and how much more diesel drivers will have to pay compared with current taxation levels.

A spokesperson for the Department for Transport was unable to give further details on the tax changes under consideration, but offered the following statement: “As the Secretary of State made clear, improving the UK’s air quality and cutting NOx emissions is a priority for this government. That is why we have committed more than £2billion for greener transport schemes since 2011 as part of our air quality strategy, with £600m over this parliament to support the uptake of electric cars. We are also investing in public transport, such as the Elizabeth Line, to help make journeys cleaner and greener.”. It's likely that if the idea comes into fruition, we'll hear more in the chancellor's autumn statement later this year.