Diesel drivers face extra taxes in the Budget

Ministers considering rises in excise duty on top of further charges for the worst polluting vehicles

DIESEL drivers could be hit with tax rises as early as this autumn to help fund Theresa May’s plan to bring an end to the traditional car by 2040.

The Government’s air quality strategy warns that plans to reduce the level of harmful nitrogen dioxide emissions on Britain’s roads could be funded “through changes to the tax treatment for new diesel vehicles”.

It says that Philip Hammond, the Chancellor, is examining plans for the “appropriate tax treatment” for diesel cars and could announce rises in his Budget in the autumn.

The Daily Telegraph understands that ministers are considering increasing vehicle excise duty on new diesel vehicles to raise revenues to pay for measures that reduce emissions.

However, Steve Gooding, director of the RAC Foundation, said: “Raising the tax on new diesel cars would be ironic because it is the vehicles in the showroom today which are the cleanest of the lot.

“Once again drivers are left not knowing which way to turn. With so much uncertainty … the decision over which car to buy – new or second hand – has never been harder, but large tax differentials between fuel types is likely to mean the diesel market is killed off much sooner than 2040.”

It comes on top of plans which could see diesel drivers on congested roads in towns and cities across the UK paying new pollution taxes.

Ministers have identified 81 major roads in 17 towns and cities where action is required because they are in breach of EU emissions standards, putting people’s health at risk.

The air quality strategy also suggests that the Government is unlikely to meet the demands of motoring organisations for a diesel scrappage scheme, under which drivers would receive compensation for trading in polluting vehicles. It says it will only consult on a “possible” scheme in the autumn, and warns that middle-class families who can afford to buy a new car are unlikely to benefit from it.

The strategy emphasises that the scheme must “help those who need it most”. It says: “Evidence from previous schemes suggests that those who benefit are those who could otherwise afford to purchase a new car: with those who are unable to bridge the funding gap unable to take part.”

As a last resort local authorities will

‘Large tax differentials between fuel types is likely to mean diesel market is killed off much sooner than 2040’

be allowed to impose tough restrictions on the most polluting diesel vehicles as soon as 2020 to bring down the levels of harmful emissions.

These can include charges or bans on diesel cars travelling on roads with high levels of pollution at peak times.

However, the document encourages councils also to pursue “non-charging” measures such as retrofitting the most polluting diesel vehicles, changing road layouts and removing speed humps.

Mr Gove told the Today programme on BBC Radio 4: “I don’t believe that it is necessary to bring in charging but we will work with local authorities in order to determine what the best approach is. If a local authority believes that charging is necessary in order to secure compliance then we’ll work to ensure that plan can be implemented appropriately, but on the evidence I’ve seen, while charging could bring local authorities in to compliance with the law, it’s not necessary.”

On scrappage schemes, Mr Gove said previous ones had been “poor value for money” and noted people were already moving away from diesel cars.

He said: “If local authority areas, and the Mayor of London has prepared his own proposal, can come up with scrappage schemes that are value for money and appropriately targeted then we certainly have no ideological … objection to them, and I will work with any particular local authority area that believes a scrappage scheme would be effective and value for money.”

The documents say that chargingpoints will be installed every 20 miles on English motorways and main roads as part of a bid to encourage more electric cars.

There are already 11,500 charging points in Britain and £500 grants are available for people installing charging ports at home.