Car taxes could increase after lockdown – here’s why

26 June 2020

Government has "once-in-a-lifetime opportunity" to rebuild society after coronavirus, say advisers

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A climate change group led by a former minister want the Government to increase car taxes and quickly ban sales of new petrol and diesel vehicles, according to a new report.

The Committee on Climate Change (CCC) is urging the Government to increase the Vehicle Excise Duty (VED) system, commonly called road tax, by 2021.

It wants the Chancellor do this so the UK can meet its target of carbon neutrality by 2050.

VED is a yearly tax based on vehicle emissions. The more a motor vehicle pollutes, the more its owner pays.

The CCC thinks raising the tax would nudge people away from driving fuel-powered cars and towards greener travel options.

It is also calling on the Treasury to “provide stronger incentives to purchase zero emission vehicles and halt the shift towards larger, higher emitting vehicles".

Last year the Government brought forward its ban on all new petrol and diesel cars, including hybrids, from 2040 to 2035.

The CCC wants this to be brought forward further, to 2032, as in Scotland.

“The Committee's assessment is that the date should be brought forward to 2032 at the latest, and backed by detailed policy arrangements to deliver it,” the committee writes.

The CCC says the government has the opportunity to change society for the better and rebuild from the coronavirus pandemic.

CCC chairman and former agriculture minister Lord Deben says: “The UK is facing its biggest economic shock for a generation. Meanwhile, the global crisis of climate change is accelerating.

"The steps that the UK takes to rebuild from the Covid-19 pandemic can accelerate the transition to a successful and low-carbon economy and improve our climate resilience. Choices that lock in emissions or climate risks are unacceptable.”

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