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The Insider – Jumping the gun

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This month, The Insider is caught off-guard by updates to VED and questions the speed of changes.

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“This year is bound to see a significant shake up in terms of choice list.”

Well I definitely took my eye off the ball this time.  Despite prior warning in the news, I failed to calculate the actual impact of the amended vehicle excise duty rates (VED).  I know, because I’ve been told, that I’m not the only one.  It was only when the phone started ringing, with employees telling me such and such a car had dropped off the choice list, that the impact fully dawned.  And I thought I’d better do my homework.

Since we lease, the most practical way was to compare old and new rate lists.  From which I discovered that the lowest emission cars suffered the biggest increase.

Cars with a CO2 of 82 have increased anywhere between three and five per cent; whilst those above 132g/km a mere 0.62%.  A popular, sensible fleet car like an Insignia rises from £120 VED over four years to £580, or around £12 per month, which, multiplied across a large fleet is a significant increase in costs, with no benefit whatsoever.  So how does that encourage take up of lower emission vehicles then?

What it also means is that the annual rate increase can’t simply be uniform across all our grades.

But this year is bound to see a significant shake up in terms of choice list anyway.  Thanks to fudged emissions, when we start using real-world consumption figures CO2 levels must surely rise?  The ongoing Brexit negotiations must have some effect on currency fluctuations and thus pricing.  In other words, uncertainty all round.  We may have to change our rates and emissions grading more than once this coming year.  The icing on the cake is Government announcing that they will be doing “something” about diesel later this year.

With 38 out of 43 UK air quality zones breaching limits for air pollution, yes we have to improve air quality, but trying to make an informed and workable decision by later this month is just plain ridiculous.  We can applaud MPs from four major committees (environment, food and rural affairs, health and transport) trying to reach a  joined up solution but they would be superhuman to reach one in so short a timescale.  I get the distinct impression that in car terms, they are not sure where to head, and there is a real danger that well-intentioned but misinformed people with loud voices in high places could cause  fleets a real headache in the short term.

I’m presuming diesel cars will be sufficiently punished that we are drawn back to petrol in quantities, and can only hope that manufacturers are ramping up production accordingly, and that the oil companies are gearing up for the switch.  I remember being told, and it could have been eyewash, that it takes around two years to accommodate a large swing in petrol/diesel production.  One has to wonder at the timescale envisaged.

Due to lengthy cycles of expensive assets, fleets have long asked for sufficient notice of future taxation so we can plan ahead.  Just at the moment we are being subjected to not so bright ideas being rushed through, seemingly on a whim.

Whilst Britain mulls over the fairness or otherwise of scrappage schemes, and Government seem prepared to let individual cities make their own rules on clean air zones, even  the French are ahead of us on this one.  The new Crit-Air initiative requires one to purchase coloured stickers according to your vehicle’s European emissions standard category.  There’s a sliding scale, with a green badge for electric and hydrogen cars falling into the lowest category, and a rainbow selection of colour and pricing for the rest.

Anything that doesn’t meet the required standards, as well as any vehicle built before 1997, is banned from entering Paris between 8am and 8pm on weekdays, after 31 March.  And it’s not just Paris, for Grenoble and Lyon have been operative since January this year, with 23 other towns – including Dunkirk and Arras closest for us Brits – due to follow suit.

That’ll be another item for the driving-abroad checklist then.

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