The Government is set to introduce “significant increases in company car taxation” as it struggles to keep CO2 emissions and urban air quality under control, according to Don Potts, environmental consultant and former adviser to the Department of the Environment.
Potts is predicting that road user charging and ‘clean air’ zones in cities will become widespread over the next three years and that business car users will bear the brunt of the costs. He said Government “likes taxing business car users” because of the lack of political fall-out.
“You need to get ready for this. There are significant challenges ahead for this industry,” he told delegates to a Cap Focus meeting. “The Government knows there will not be a lot of complaints and company car taxation is relatively easy to administer.”
Despite the current emphasis on reducing CO2 which has led to a boom in diesel car sales, Potts believes the emphasis will soon switch to air quality and, in particular, nitrous oxide (NOx) and particulate emissions from diesel engines. He claims there are 200,000 deaths a year in Europe related to poor air quality and 20,000 deaths a year in the UK.
The change will be led by London where there are already plans to introduce a Low Emission Zone for diesel lorries, coaches and buses next year. Vehicles that fail to meet a minimum pollution standard face having to pay a charge if they drive within Greater London.
“Diesels will come under a lot of pressure because of clean air legislation,” predicted Potts. “If Ken Livingstone is re-elected, he will spread the Low Emission Zone to passenger cars. We already have 130 other UK cities looking at an air quality strategy and you are going to hear a lot more about air quality and vehicles.”
Potts told delegates the “political hot potato of road user charging is now back on the agenda” and suggested much of the groundwork would be in place before a general election in May 2009. At present the project is being held back by a lack of suitable technology and Potts believes the Government will opt for roadside cameras to avoid accusations of tracking private mileage with satellites.
He suggested journeys would be priced at 35p a mile for urban motorways and 5p a mile for rural routes.
According to his sources within the Treasury, the Government is also considering raising VED on Band G cars to significantly greater levels; perhaps as high as £1500 to £2000 a year.
