Autumn Budget: Chancellor should focus on red diesel

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With the Autumn Budget days away, Chancellor Philip Hammond is considering new taxes for diesel cars.

This will be perceived as grossly unfair by drivers facing higher bills but who see the Treasury subsidising cheap diesel for weakly regulated secondary engines.

These secondary engines, featuring particularly on refrigerated delivery trucks going around cities, can emit up to six times as much nitrogen oxide (NOx) and 29 times as much particulate matter (PM) as a heavy goods vehicle’s main Euro 6 engine.

The new regulations governing these engines, applying from 2019, will continue to allow this extremely high level of pollution.

Furthermore, because these secondary engines are legally classed as ‘non-road mobile machinery’- a misnomer as they are only used on roads- the Treasury allows them to use subsidised red diesel.

The combination of weak regulation and allowing red diesel means the Treasury is effectively subsidising the disproportionate air pollution from a refrigerated delivery truck’s second engine.

Subsequently, diesel car drivers will rightly feel aggrieved if they are the ones being forced to cough up higher taxes and upgrade vehicles to clean up Britain’s air.

The Treasury can easily avoid this scenario in a move that would have strong cross-party and public support. MPs from the Conservatives, Labour, Liberal Democrats, Scottish National Party, Green Party, Democratic Unionists have all given their support to ending red diesel subsidies in transport refrigeration units.

An independent poll of 1,000 UK residents, recently commissioned by Dearman, showed that two in three members of the British public would also support this move.

Not to forget the financial benefit for the Treasury- being able to claw back the £126 million currently spent on this subsidy.

The Chancellor was right to announce a consultation earlier this year on red diesel use in urban areas and cancelling this subsidy, especially with zero emission transport refrigeration units affordably available on the market, should be a no-brainer.

Raising taxes on ordinary car drivers instead, while continuing to subsidise dirty second engines, will be rightly seen as unfair.

By David Sanders, commercial director, Dearman

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  • David Hartley - 15/02/2018 15:00

    With regard to the ending of subsidies on refrigeration units on HGV's, this is all well and good and I totally agree with the reasons for doing this and the financial benefits to the treasury. However, as these vehicles generally deliver to supermarkets and related industries how will the increase in costs to the transport companies be dealt with? If they pass them on to thier customers it will ultimately affect the price the consumer pays for the goods, and therefore in effect a 'tax' for the consumer. I know there is no easy answer to this, and some hauliers may accept that they have to absorb this in the first instance.

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