Fears are mounting that diesel could be targeted in the chancellor’s Autumn Statement, with the fuel type being hit with tax rises.
FairFuel UK says operators of diesel cars and vans should not be financially penalised, because of a “knee-jerk reaction” to the emissions scandal.
But, the campaign group told Fleet News it has heard from Whitehall sources that the Treasury could yet decide to target diesel.
It understands that measures on the table could include higher Vehicle Excise Duty rates, a purchase tax on used diesel vehicles, a 1p to 2p rise in duty just on diesel and even an increase in VAT for the fuel type. “This could cause used diesel car and van values to collapse and add millions in extra costs to families and businesses across the country,” said lead FairFuel UK campaigner Quentin Willson.
The tax take on fuel is already very high. More than two-thirds (70%) of the pump price in the UK is down to tax, making it the highest in the EU for diesel and the second highest for petrol.
Fleets have also been swayed by previous Governments to choose diesel over petrol variants. In 2001, the Labour Government reduced the tax on low sulphur diesel and drivers were told that diesel fuel emitted less CO2 and was better for the environment.
Diesel sales in the UK rose as a direct result of this policy change, with 50% of all cars now being powered by diesel engines and fleets operating the lion’s share.
The Chancellor George Osborne will deliver the Autumn Statement to Parliament on Wednesday, November 25. In the meantime, Howard Cox, co-founder of FairFuel UK, says he will be writing to all MPs and asking where they are positioned on the future of diesel taxation.
“There’s a great danger that diesel hysteria could get out of control,” explained Cox. “This Government needs to reassure businesses and drivers that they won’t face financial hardship for choosing diesel cars and vans.
“Clean air in our town and cities is an urgent priority, but we can’t fix this overnight with draconian taxation levels. Reducing diesel emissions is something that must happen but needs reasoned and informed debate.”
FairFuel UK is calling for a cut in duty in November’s Autumn Statement by at least 3p per litre and for an independent transparent pump pricing inquiry as to why prices at the pumps do not accurately reflect the volatile changes in the oil markets. They have just secured an All Party Parliamentary Inquiry on December 8 that will ask companies in the fuel supply chain as to how they influence prices at the pumps.
It is also investigating the potential for a class action in the Europe Court against what it describes as the double taxation of fuel, with consumers paying VAT on fuel duty.
A “leading MP” is also in the process of organising an Early Day Motion in Parliament to question the legality of consumers having to pay tax on tax.
FairFuel UK thinks that success in the European courts would take 10p per litre off the pump price.
Cox continued: “The powerhouses of Europe such as France and Germany actually subsidise diesel engines with lower fuel duty. They recognise that the commercial heartbeat of the economy is actually driven by diesel – we don’t in the UK.”
The campaign group, which has 1.2 million members and claims success in stopping £30 billion in fuel tax hikes over the past five years, says that lower pump prices are good for the economy.
It is calling on the Government to introduce a scrappage scheme for older diesel vehicles to incentivise the switch to petrol, hybrid or electric, and an enquiry into the reasons why modern diesel particulate filters have a high failure and blockage rate.
It also wants the creation of an independent data bank of the emissions content of all diesel cars and vans, new and old, which can be easily accessed by consumers, and more research into the health risks and toxicity of diesel emissions.