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Diesel's fate a 'done deal' ahead of 2017 budget

Philip Hammond

Diesel vehicles' fate is sealed according to car retailers speaking ahead of a government budget which is likely to a strict new tax regime for vehicles powered by the fuel.

Coming as part of a push to encourage more motorists into greener vehicles following the unveiling of the government’s “Clean Air Strategy” by Michael Gove, the environment secretary, in July, a new regime said to be part of next Wednesday's announcements could take the form of an increase in VAT on diesel sales or a new levy, according to the Financial Times.

If this is the case, the budget could prove another major blow for the fuel type which has experienced a sales slump of 14.9% in the year to October.

Just 39.4 % of October’s new car registrations were diesel, marking only the second time the figure has dropped below the 40% mark since 2009.

Car retailers attending the Automotive Management Live expo at Birmingham’s NEC last week said that there was still a place for diesel cars, but added that “the course has already been set” for a move towards petrol, hybrid and electric vehicles.

One AM reader said: “It’s a done deal. The public still need to be educated on what the best vehicle is for them right now – with diesel being the cheaper option for those covering more miles – but in the longer term diesel will become harder and harder to sell.”

Earlier this year the government’s Clean Air Strategy promised an end to sales of all non-hybrid petrol and diesel cars by 2040.

Now the FT said that aids to the Chancellor of the Exchequer, Philip Hammond, will tighten up taxation around diesel vehicles to further discourage their use.

The decision would follow that of the Mayor of London, Sadiq Khan, to impose an additional £10 daily charge on older diesel vehicles in the city centre. 

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