Today’s new car registration figures show that last year’s changes to Vehicle Excise Duty (VED) have now led to a whole year of declining new car registrations. The decline started on the day the new regime that Chancellor Osborne designed, and Hammond implemented, kicked in. The ABD calls on Chancellor Philip Hammond to immediately address the issue before further harm is done. The October budget will be too late.
ABD spokesman Nigel Humphries explains: “Due to the confusion created by the shambolic new tax regime, rather than trading in their existing cars, usually economical diesels with cheap or free VED, drivers are choosing to hang on to their old car. This is having a disastrous effect on new car sales. Why would you buy a new car when a) The road tax will likely be higher; b) If buying a diesel, there is no guarantee that local authorities will not in future introduce all manner of charges for parking or even entering towns; and c) If buying a petrol then economy will be poorer than your existing diesel?”
The ABD calls for four immediate changes in the VED regime to reinstate confidence and fairness in the market:
1. The government must announce with immediate effect that no local authority will be allowed to impose discriminatory charges on any type of car or motorcycle for parking or entering a zone based upon type of motive power. Those that have already, including the London Mayor, must scrap them.
2. The zero VED band and sliding scale should be reintroduced for low emission new cars.
3. VED should be capped at £300 pa for all cars over three years old, ending the anomoly where certain cars sold between 2005 and 2018 pay up to £535. This will help the lower income driver. When newer models with equivalent CO2 figures only pay £140 after the first three years £500+ cannot be justified.
4. New electric cars should pay VED of £500 and the gift of £4,500 from the taxpayer to buyers should be scrapped. It is grossly unfair on other drivers that those who can afford expensive new electric cars cars pay nothing at all to use the roads whilst others pay thousands in fuel duties and VED. EVs cause as much congestion and wear to the system as any other car. £500 is still substantially less than most other drivers pay (10,000 miles pa 40mpg car pays around £1,100 fuel tax and VED) and is more than sufficient reward for their green credentials.
