DIESEL DRIVERS FACE TAX HIKE

Motorists braced for higher prices at pumps in Budget

DRIVERS of diesel cars were last night warned to brace themselves for a rise in fuel duty in tomorrow’s Budget.

The Petrol Retailers Association said it had been told that Chancellor Philip Hammond will increase duty on diesel by 1p a litre – the first rise for more than seven years. The PRA, which represents 70 per cent of forecourt operators, said petrol duty would be cut by a similar amount in an attempt to encourage motorists to move away from diesel vehicles, which are blamed for air pollution.

The move would raise an additional £800million a year for the Treasury because of the widespread use of diesel by the haulage industry.

The Chancellor is also said to be considering measures to raise the cost of buying new diesel cars – either through a higher rate of VAT or through a specific new levy.

It comes after drivers were for years encouraged by Tony Blair’s government to buy diesels. Labour used generous tax breaks to persuade millions to switch to vehicles powered by the fuel.

At the time, scientists said they were better for the environment because they generated less carbon dioxide than petrol cars.

But scientists now say that diesel cars are worse for the environment and a bigger health risk than petrol vehicles because they emit larger amounts of toxic nitrogen oxide, which has been linked to respiratory diseases.

Brian Madderson, chairman of the

PRA, described the proposed move on fuel duty as a ‘thinly disguised tax grab using air quality i ssues as justification’.

He added: ‘ We have repeatedly warned the Chancellor against such an economically regressive move because it will push up prices for consumers and businesses already suffering with inflation at a five-year high.

‘To force this increase at a time when crude oil and worldwide wholesale costs are ramping up, is also at odds with the Government’s avowed aim of supporting the UK economy in the lead up to our formal exit from the EU in 2019.

‘Does the Chancellor really want to hammer already hard-pressed consumers, damage the economy and make us less competitive with our European neighbours?’

The Treasury has refused to comment on fuel duty ahead of the Budget, but Mr Madderson said information about the planned increase had come f r om a ‘ well- placed source’ at Westminster.

Fuel duty has been frozen since 2010 and Mr Hammond has been under intense pressure to maintain the freeze at a time of rising inflation.

But some at the Treasury believe they could continue to claim the freeze was in place if a rise in diesel duty is balanced by a cut in petrol duty.

Motorists currently pay around 78p in tax on a litre of diesel, costing just under £1.23. This includes 57.95p in fuel duty as well as VAT.

Diesel drivers have already been warned they face the threat of higher taxes in the Budget as the Government tries to meet air quality targets.

The Treasury has examined plans to raise vehicle excise duty (VED) on all diesel cars.

But the Chancellor has been warned by senior Tories that this would be seen as punishing drivers who bought their cars in good faith at a time when the government was encouraging people to choose diesels.

In his 2001 Budget, Gordon

‘Thinly disguised tax grab’

Brown, the then Labour chancellor, cut low- sulphur diesel duty by 3p to reward drivers of diesel cars.

The tactic – which aimed to help Britain hit EU carbon emissions targets – contributed to the number of UK diesel drivers jumping from around 1.5million a decade ago to about 11million today.

The VW emissions scandal highlighted how in many cases diesel cars are far worse for the environment than manufacturers claim. A coalition of health and environmental groups last night wrote to the Chancellor urging him to raise VED on diesels to tackle the ‘ health crisis’ the vehicles ‘cause’.

The Healthy Air Campaign also urged Mr Hammond to introduce a scrappage scheme for older diesel cars.

But the group FairFuelUK said that more than 30,000 supporters had emailed the Chancellor over 48 hours with a plea for him not to hit families and businesses ‘struggling to make ends meet’ in his attempts to win green credentials for his Budget.

In their mass email, they warned that raising fuel taxes or VED for diesels would ‘ hit the most vulnerable who have no other choice and simply can’t afford to upgrade their vehicles to newer models’.

‘We already pay the highest fuel duty in the world for diesel and the third highest for petrol. So, please don’t increase the tax on diesel just to look green,’ the email said.

Motorists in some parts of the UK already face financial penalties linked to air pollution.

Sadiq Khan, mayor of London, l ast month l aunched a £ 10 toxicity charge aimed at older, more polluting vehicles on the roads of central London.

The fee, on top of the existing £ 11.50 congestion charge, applies mainly to vehicles registered before 2006.