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Scandal over air quality to increase pressure for new diesel taxes

Pressure is mounting on the government to introduce new diesel taxes as revelations come to light that ministers knew about the health hazards from diesel vehicles but chose not to clamp down on diesel vehicle uptake.


Newly uncovered documents suggest the Government was aware of air quality issues from diesel engines.

The history behind the revelations is not new; the government’s shift in 2001 to using a CO2-based regime for taxing cars – and replicated from April 2002 for Benefit in Kind company car tax – had the unintentional outcome of giving many motorists, in particular fleet drivers, an incentive to switch to diesels, rapidly driving diesel uptake to around half of the new car market from less than 10% in the mid 1990s.

Since then, the impact on air quality and health issues has gradually come to light, including last year’s research that found the UK has one of the highest levels of premature deaths from nitrogen dioxide (NO2) pollution in Europe.

However, the Treasury documents revealed by the BBC indicate the government actually knew about the damage being done by diesels while preparing the 2000 Budget but rejected imposing larger car tax supplements on diesels due to concerns over being seen to penalise them.

Meanwhile HMRC evaluation of the company car tax reforms, published in 2004, warned: “The shift from petrol to diesel will have had an effect of increasing emissions of some local air pollutants (such as NOx and particulates) that are produced in larger quality quantities by diesel cars.”

Following the BBC report, environmental organisations including law firm ClientEarth and GreenPeace are calling for immediate action to cut down on the number of diesels on the roads in advance of next week’s Autumn Budget, which has been expected to bring some form of new diesel tax, as first mooted in the Spring Budget.

For ClientEarth – which is currently embarking on a third round of legal action against the government to address air quality plans – the findings give added weight to its campaign for a national network of Clean Air Zones based on a charging infrastructure. 

James Thornton, CEO of ClientEarth, said: “We now know that the government has known for decades that diesel was harmful. And we’re still living in a country with illegally poor air quality, despite two court orders against the government, while the tax system continues to favour the very vehicles that keep it dirty.

“The Budget is the current government’s golden opportunity to make good on its duty to clean up our air. With the right policies, the chancellor must urgently abolish the incentives that have condemned the country to illegally poor air quality for decades.”

ClientEarth is also calling for reforms of the vehicle tax system so it is based on what vehicles actually emit on the road and a diesel scrappage scheme.

Yet there are have also been calls in recent months for any diesel taxation scheme to take a fair approach while the RAC has warned that any new diesel taxation may actually “back-fire”, inadvertently leading to older, more polluting vehicles staying on the roads for longer. The BVLRA has also said implementing further taxes on diesel vehicles would be “grossly unfair” and could actually force fleet drivers into opting for higher-polluting vehicles under cash allowance schemesThe SMMT also highlighted that Euro 6 standards mean latest diesels are at their cleanest ever level.For more of the latest industry news, click here.

For more of the latest industry news, click here.

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.