Diesel scrappage scheme: How Budget 2017 could mean your diesel car becomes worthless

Budget 2017 UK could spell trouble for diesel car owners as a planned scrappage scheme could be announced, which would force drivers to ditch their diesel car. 

The current ‘anti-diesel’ initiative in the UK is trying to outlaw the highly polluting cars across the country.

Air pollution caused largely by diesel cars emitting high levels of NO2 and particles is thought to attribute to 40,000 deaths in the UK every year. 

Nitrogen pollution also costs the economy £20billion a year, according to a study by Royal College of Physicians. 

In the Budget today, Chancellor Philip Hammond is likely to outline whether or not diesel cars will be banned and how the Government is tackling the air pollution problem. 

What could be announced?

Chancellor Philip Hammond is likely to announce increased investment in electric and alternatively fuelled cars across the UK.

This could include additional charge points being made available across the country, cut price home charger installations and making buses, public transport and taxis all battery powered. 

In London, Islington Council is already rolling out schemes to remove both petrol and diesel cars from the borough.

They are also increasing their charge points from 10 to over 100 and introducing fast charging lamp posts. 

“We are taking the lead and rolling out this cutting-edge technology in our streets, and will continue to explore every avenue to help improve our air,“ said Cllr Claudia Webbe, executive member for environment and transport. 

Also money is likely to be invested into the grid to ensure it can cope with the increased demand on it from electric car charging. 

Parts of London are already increasing use of electric cars and Liverpool wants to make them part of the ‘central heart’ of the city. 

Fuel duty freeze 

Scrapping the fuel duty freeze and investing the money in alternatively fuelled private travel should be a priority. 

The freeze since 2011 has cost the Treasury over £37billion which could be invested elsewhere into tackling the pollution problem. 

In addition to this the cost of public transport has risen significantly, costing commuters hundreds and thousands a year. 

The Government should use the money from this tax rise to invest in clean forms of transport – cycle lanes, walking routes, affordable zero-emissions public transport. 

Diesel scrappage scheme 

Chancellor Philip Hammond could finally announce the details of a diesel srappage scheme which would offer drivers incentives to ditch their polluting diesel cars to buy a low emissions version.

How much diesel drivers will actually be paid is not yet confirmed.

If the Government pay attention to London Mayor Sadiq Khan’s demands, the money offered to diesel drivers will be around £3,500 with an additional £2,000 offered to low-income families. 

However, the Government could opt to follow the French scheme where a figure of up to £8,500 is offered to ease the transition. 

The value of diesel cars could deplete significantly if a scrappage scheme is put in place in the UK. 

Maximilian Vollenbroich from Carspring believes that the scrappage scheme will make the value of diesel cars deplete significantly. 

“There will be a depletion of residual value of diesel cars that just fall outside of the scheme.

“In terms of attractiveness to buy, they will move to the bottom.”

Additionally by 2022, diesel cars could be banned from Liverpool city centre and by 2019, diesel cars will have to pay £22.50 to enter the city centre (toxic charge and congestion charge). 

In London, drivers will pay 50 per cent more to park in the city centre and a new toxic charge will see drivers paid an extra £10 from October to drive in the city centre.

VED car tax  

The new car tax rules were announced last month outline that all cars would pay a flat rate of £140 after a one off first year charge. 

Cars which emit high levels of CO2 will be struck by significantly higher charges in the first year but will then pay £140 after that. 

This adds to the overall running cost of low-emissions cars, while some of the biggest polluters will benefit from lower car tax over a five year period. 

However, the car tax rules should incorporate Nitrogen (NO2 and NOX) emissions as a factor to how much car tax an individual should pay. 

Diesel cars contribute 40 per cent of the NO2 into the environment, so stricter charges need to be implemented to outlaw these cars.