Diesel cars have come in for another hammering from the government in the Autumn Budget, despite pleas from industry figures to arrest the negative publicity that has led to sliding sales.
Chancellor Philip Hammond announced that all new diesel cars sold from 1st April 2018 will have their Vehicle Excise Duty (road tax) raised by one band, unless they meet new Real Driving Emissions (RDE) step 2 standards. Existing cars on the road before 1st April 2018 will not be affected.
The RDE test has been introduced to measure car emissions in real-world driving conditions – it uses portable measuring equipment attached to a car and its results include such elements as what a vehicle is carrying and the weather. The currently used tests that produce the emissions and fuel economy figures quoted by car manufacturers have been widely criticised because they are conducted in a laboratory, with virtually no likelihood of owners living with a car being able to achieve results anywhere near the official figures.
The RDE tests will be combined with the existing laboratory tests to produce more accurate economy and emissions results for new cars. The step 1 tests were introduced for new cars from September 2017 and are planned to apply to all cars from September 2019, while the stricter step 2 tests will not become mandatory on all new cars until 2021. Due to the portable testing devices not yet delivering completely consistent results, step 1 allows cars to emit up to 2.1 times the prescribed limit – under step 2 this will be reduced to 1.5 times as the equipment becomes more accurate.
Very few car manufacturers have yet submitted their cars for RDE testing and it is thought that most current cars on the market will not currently meet particularly the step 2 standards, so anyone buying a diesel after March next year will pay, on average, £40 extra in tax.
Company drivers hit
Company car motorists have been targeted too, with the supplement for anyone driving a diesel-engined fleet car rising from 3% to 4% – again unless the car meets the RDE step 2 standard. And this change has been made despite the Chancellor previously promising to give three years’ notice on any company car tax hikes.
Chief executive of the Society of Motor Manufacturers & Traders (SMMT), Mike Hawes, criticised the Chancellor’s moves as continuing the mixed messages around diesel which will only deter and confuse the public further.
“Diesel buyers will not face any additional taxation for the next six months, but thereafter, will face additional charges which will undermine fleet renewal efforts, which are the best and quickest way to address air quality concerns,” Hawes said.
“Manufacturers are investing heavily in the latest low emission technology, however, it’s unrealistic to think that we can fast-track the introduction of the next generation of clean diesel technology which takes years to develop, in just four months. This budget will also do nothing to remove the oldest, most polluting vehicles from our roads in the coming years.”
In contrast, the chief executive of the British Vehicle Rental and Leasing Association, Gerry Keaney, welcomed the VED tax hike as “a fair, well-signposted tax change that will encourage more drivers and fleets to look at alternative hybrid and petrol-powered new cars.”
However, he was fiercely critical of the change in company car tax rates. “Having previously promised that it was only looking to change the tax treatment for new diesel cars, the government has gone back on its word by retrospectively raising the company car tax bill of hundreds of thousands of workers,” he said.
“People that chose a diesel car as a cost-efficient, low CO2 form of essential business travel are being punished unfairly. Why should drivers at work be treated differently from other taxpayers?
Diesel sales slumped by almost 30% in October, as buyers were turned away by the negative publicity surrounding the engines. However, increasing numbers of independent tests are suggesting that the latest diesel engines produce fewer pollutants, particularly NOx, than their petrol-engined equivalents. This suggests that only applying RDE-based tax changes to diesel engines is unfair, and that RDE testing needs to be levied equally on all new cars, no matter what their engine, to provide a much clearer picture.
The tests also point to older, less efficient diesel engines being primarily responsible for emissions issues, and the Budget contained no measures to help speed the replacement of such vehicles with newer, cleaner equivalents.
