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Chancellor urged to hike first-year VED rate for diesels

By / 4 years ago / Latest News / 1 Comment

The chancellor is being urged to revise Vehicle Excise Duty in the forthcoming Budget to increase the first-year rate for diesels to tackle air pollution.


A study by Policy Exchange proposes an additional £800 on  all new diesel cars on VED first year rates.

The Healthy Air Coalition, which includes medical professionals, lawyers, environmental and transport groups, has written to the chancellor, saying the changes are “essential in the fight to combat toxic air”.

The letter cites a study by Policy Exchange, which proposed an additional £800 additional charge for all new diesel cars on their VED first year rate, which could generate £500m a year to fund measures to tackle air pollution.

The campaigners also call for money raised from the increased VAT to go towards a scrappage scheme targeting low income drivers and small businesses. The suggested scheme would offer a vehicle exchange in return for help with the cost of switching to a hybrid or zero-emission vehicle or subsidised car club membership, free public transport season tickets or an e-bike purchase loan.

The call comes one month before new VED rates kick in using a combination of CO2 emissions and list price.

Last year saw environmental lawyers at ClientEarth win its High Court case against the UK government for failing to tackle illegal levels of nitrogen dioxide (NO2) air pollution as quickly as possible‎. The Government has now been given a July deadline for producing an improved air quality plan.

ClientEarth chief executive James Thornton commented: “The Government needs to recognise that diesel is the primary cause of the problem, and to promote a shift to alternatives. It’s perverse that our tax system encourages people to buy dirty vehicles. In his first Budget, Phillip Hammond needs to change this and do what his predecessor, George Osborne failed to do, and that is to help millions of motorists to move to cleaner forms of transport.”

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Natalie Middleton

Natalie has worked as a fleet journalist for nearly 20 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day.