Philip Hammond slapped higher tax on owners of new polluting diesel cars today in a new crackdown on air pollution.
New diesel cars will rise one bracket up the vehicle excise duty system, potentially hitting many car owners.
The tax rise excludes all vehicles bigger than cars – including white vans – to protect small businesses, Mr Hammond said as he unveiled his Budget.
Mr Hammond told MPs today that ‘no white van man or white van woman’ will be hit by the looming rise.
But motoring groups reacted with fury to the looming rise, branding it ‘unnecessary’ and hits ordinary Britons who rely in their cars and are already feeling the squeeze.
Philip Hammond slapped higher tax on owners of polluting diesel cars today in a new crackdown on air pollution
The Chancellor said upcoming models which meet new air quality standards would not be hit by the higher charges.
But he said the future of motoring was in electric and driverless cars as the Government pressed ahead with its plans to end the era of petrol and diesel altogether.
The Chancellor announced: ‘We published our Air Quality plan earlier this year and we said then that we would fund it through taxes on new diesel cars.
‘From April 2018 the first year VED rate for diesel cars that don’t meet the latest standards will go up by one band and the existing diesel supplement in Company Car Tax will increase by 1 per cent.
‘Drivers buying a new car will be able to avoid this charge as soon as manufacturers bring forward the next-generation cleaner diesels that we all want to see.
‘And we only apply the measures to cars. So before the headline writers start limbering up let me be quite clear.
‘No white van man (or woman) will be hit by these measures.
‘This levy will fund a new £220m Clean Air Fund to provide support the implementation of local air quality plans.’
Mr Hammond took the opportunity for a dig at Jeremy Clarkson after the motoring presenter condemned plans for driverless cars on Sunday.
Clarkson claimed they were dangerous and insisted motorists should keep control of the wheel.
Mr Hammond jibed: ‘There is perhaps no technology as symbolic of the revolution gathering pace around us as driverless vehicles.
‘I know Jeremy Clarkson doesn’t like them but there are many other good reasons to pursue this technology so today we step up our support for it.
‘Sorry Jeremy, not the first time you’ve been snubbed by Hammond and May.’
But motoring groups reacted with fury to the looming rise, warning it will hit ordinary families who rely on their cars and are struggling with rising living costs
Current diesel cars will all rise one bracket up the vehicle excise duty system, hitting millions of car owners
AA president Edmund King said: ‘This just adds to the demonisation of diesel. Diesel sales have slumped this year which shows that drivers are already voting with their wheels.
‘Consumers are already making a conscious decision to buy cleaner cars, so the new sales tax is unnecessary.’
Mr Hammond decided against increasing fuel duty, which has been held at existing levels since March 2011.
The total cost of diesel reached its highest level in almost three years this week, with average forecourt prices across the UK hitting £1.23 per litre.
Steve Gooding, director of the RAC Foundation, said: ‘It is right that the Chancellor avoided calls to put up duty.
‘Transport – and for most people that means motoring – is already the largest single area of household expenditure bar none, and pump prices have recently been on the rise adding to the pressure on domestic budgets.
‘No one should feel too sorry for the Treasury. It still receives two-thirds of what we pay on the forecourts.’