20th Jun, 2019

Government to review diesel taxation after cross-party MPs campaign to save jobs

Felix Nobes 2nd Nov, 2018

THE GOVERNMENT is set to review diesel taxation after pressure from a cross-party campaign led by West Midlands MPs aiming to safeguard car industry jobs.

The review was announced as part of the Chancellor of the Exchequer Phillip Hammond’s Autumn Budget.

The campaign which includes Coventry and Solihull MPs says a recent collapse in diesel car sales – a drop of 40 per cent compared to last year – threatens significant job losses.

The plight of Jaguar Land Rover has ignited debate about diesel taxation and regulation, as well as Britain’s exit from the European Union (EU) and its effect on regional manufacturers.

Around 95 per cent of the cars produced by JLR run on diesel.

MP for Coventry South Jim Cunningham (Labour) and Warwick and Leamington Labour MP Matt Western were among cross-party MPs who wrote to the chancellor.

So was Dame Caroline Spelman, Conservative Meriden MP, who said: “This news has been welcomed by the automotive sector in our region.

“As vehicles become cleaner and CO2 emissions continue to reduce, it is important that the transition to even lower emission vehicles is supported by a sensible tax system.

“In committing to this review, the government has responded to industry concerns and helped to safeguard jobs.”

The review will examine the impact of emissions testing regime the Worldwide Harmonised Light Vehicles Test Procedure (WLTP) on vehicle taxation.

WLTP was introduced last year with the aim of being used as a global test cycle across different world regions, so pollutants and carbon dioxide (CO2) emissions as well as fuel consumption values would be comparable worldwide.

It has been criticised for effecting the availability of many vehicle models which are not approved under its testing.

The UK government introduced a new tax levy for newly registered diesel vehicles in November last year.

Dame Caroline says the automotive industry has invested large sums to reduce Nitrogen Oxide (NOx) emissions by 95 per cent since 2010.

She added that 99 per cent of particulate matter, particularly those most dangerous for public health, have been removed while diesel vehicles produce 20 per cent less CO2.

The government will publish a consultation document in the coming weeks.

A two-week shutdown in production was imposed at Solihull’s Lode Lane plant, beginning on Monday, October 22, while many staff at Castle Bromwich have seen the introduction of a three-day working week.

JLR announced the shutdown amid on-going financial troubles which it has attributed to Brexit confusion, the falling demand of diesel vehicles and China slashing import tariffs.

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