The UK’s chancellor Philip Hammond has delivered his first and last spring Budget. It is expected that this will be the first of two Budgets in 2017 with the next in autumn. In the light of current statistics about the UK’s air pollution levels, there was plenty for the chancellor to address within the motoring industry.
Investment in technologies
The chancellor announced an investment of £270m in technologies such as electric vehicles and driverless cars. Other areas include artificial intelligence and robotic systems. The investment will “keep the UK at the forefront of disruptive technologies like biotech, robotic systems and driverless vehicles”.
New VED rates will go ahead
The new VED rates which will come into effect from April 1 will go ahead as planned. The change to VED means the first year of tax will be based on CO2 emission levels (up to an initial cost of £2,000). After the first year, all cars – aside from zero emission cars – will cost £140 a year to tax.
So, drivers with high-emission vehicles will be hit with a large upfront cost instead of it being spread over a number of years. Full details of the VED changes can be found here.
Potential for a diesel tax
Air pollution is a hot topic at the moment and the UK has recently received its final warning from the European Commission in regard to breaching NO2 levels. There have been many campaigns to help cut pollutions that account for many deaths every year in the UK, but the chancellor seemed to avoid the issue.
Instead, it is likely that a diesel tax could be addressed at the autumn Budget. A detailed draft of a plan to improve the UK’s air quality will be published in spring and the government will consider exploring “the appropriate tax treatment for diesel vehicles, and will engage with stakeholders ahead of making any tax changes at Autumn Budget 2017”.
Investing in new technology is necessary to address air quality issues and develop new driverless and electric cars. Doing so will increase the popularity of and encourage uptake of low emission vehicles.
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