The government has announced plans to crack down on heavily polluting vans and an investigation into the effects of ‘red diesel’ on air quality.
In his Spring Statement, the chancellor of the exchequer said a consultation looking at the duty paid by vans would be launched to try to increase the use of less-polluting vehicles.
Vehicle excise duty for light commercial vehicles is currently £140 per year and will rise to £150 from April, with a flat rate regardless of a vehicle’s emissions. However, Philip Hammond didn’t clarify whether bringing in a reduced tax would aim to encourage the take-up of new diesels or a move to electrified alternatives.
A spokesperson for the Treasury said: “We want [van operators] to move to cleaner vehicles. We haven’t explicitly said which ones, but fully electric vans don’t pay any VAT and you can get a grant of up to £8,000 on ultra-low emissions vehicles, so there already is an incentive when you buy the cleanest models.
“It’s obvious from the current system that there isn’t necessarily an incentive for van drivers to go cleaner.”
Meanwhile, there could also be a clampdown on the use of ‘red diesel’ in inner-city construction equipment.
Hammond issued ‘call for evidence’ on the fuel, which is intended to be used in farm vehicles and heavy machinery. At 11.14p per litre, it’s taxed much lower than the diesel found on forecourts across the country, which has a 57.95p per litre levy imposed, and its use in passenger vehicles is illegal.
The consultation will look at whether using red diesel in stationary equipment in cities contributes to poor air quality, with a potential increase in tax introduced to discourage construction firms from using it.
Additional reporting by Tristan Shale-Hester