Criticism of the UK government鈥檚 weak stance on air quality has been growing in recent years. In the face of increasing evidence about the harm diesel engine pollution causes in particular, there was much anticipation that yesterday鈥檚 budget would tackle this head-on.
It never happened. just fiddled at the margins instead. His central policy, or at least the one garnering most attention, is an increase in first year vehicle tax for new diesel cars. Vans are exempt. As new vans are driven almost twice as far on average as new cars, this raised concerns. However, over seven times as many cars were sold in the UK in 2016 as vans, so in that sense it will hit the majority of new diesels.
The real problem is that this measure is unlikely to have any impact at all on vehicle use. Car tax is often considered a . This is because it makes up an extremely small part of the overall budget for motorists 鈥� particularly when compared with the per-mile impact of fuel duty.
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What鈥檚 more, the new measure applies only to the first year of tax after purchase of a new car. It does nothing about existing, older diesels, which are often more polluting. In addition, just over half of new cars are bought by companies rather than private individuals. For fleet buyers, the influence of one-off costs such as car tax are even less significant when set alongside the wages of the driver, cost of fuel, insurance and depreciation.
Tax bands
The new tax banding scheme breaks into two distinct sections: cars emitting 130 grams of CO2 per kilometre or less will generally see tax rise by 拢40 or less in the first year. Those with cars emitting more than that will see a 拢300 to 拢500 increase.
This means that for buyers of smaller, more efficient diesel cars, the penalty is minimal, equivalent to around 2 to 3 per cent of the average annual spend on fuel. For high CO2 cars, the rise equates to between 20 and 25 per cent of average fuel costs. However, these high-emitting, fuel-inefficient vehicles have been described in the press as being Porsches and Land Rovers, prestige vehicles where this increase will make little difference to relatively well-off purchasers.
Are there any rays of hope? Even if the tax rise does nothing to change diesel car use, the use of the revenue from it to launch a new Air Quality Fund of 拢220 million has to be cautiously welcomed. Specific funding for measures to reduce air pollution has, to date, been very limited. Last year鈥檚 pot of money was only 拢3.7 million across all English councils, with only 拢57 million allocated since the scheme began in 1997.
While the chancellor fiddled at the margins, our work in the strongly shows that only a much stronger focus on reducing vehicle use will significantly cut air pollution and greenhouse gases from driving. Nothing in yesterday鈥檚 diesel tax announcement will do that.
