Chancellor Philip Hammond has ‘fired a warning shot at diesel drivers’ with his hint of a new tax regime by the end of the year, the RAC has said.
The budget document states that the Government ‘will continue to explore the appropriate tax treatment for diesel vehicles, and will engage with stakeholders ahead of making any tax changes at Autumn Budget 2017’.
A VW diesel car
However, despite a warning from transport secretary Chris Grayling that drivers should ‘take a long, hard think’ before buying a diesel vehicle, Wednesday’s budget did not include either an immediate tax change on the fuel itself or a proposal for a scrappage scheme for older diesels.
RAC chief engineer David Bizley said: ‘The chancellor has fired a warning shot at diesel drivers, with the suggestion in the Budget document that a new tax regime covering diesel drivers could be introduced before the end of the year.’
He added: ‘This uncertainty is bound to be of concern to private and business motorists alike, who will be wanting urgent clarity on just what the Government plan to do. The RAC will take a leading in representing motorists when the consultation goes live.’
Debbie Wood of the Chartered Institute of Environmental Health said: ‘The chancellor stressed that this budget was about investing in Britain’s future. But when the moment came, he failed to remove Vehicle Excise Duty incentives for diesel fuels or introduce a scrappage scheme for older polluting diesel vehicles.
‘We will look back at this as yet another opportunity missed by the Government to improve air quality for the benefit of future generations.’
The Government will publish a call for evidence on the use of red diesel, which attracts a lower rate of duty, ‘in order to improve understanding of eligible industries and current use’.
Officials said: ‘Evidence is particularly sought on the use of red diesel in urban areas.’