Vehicle Excise Duty: Carbon Dioxide Emissions

Lord Brabazon of Tara Excerpts

Monday 29th June 2015 Lords Chamber

Asked by

[Lord Brabazon of Tara]

To ask Her Majesty’s Government whether they plan to change the basis on which Vehicle Excise Duty rates for new cars are calculated by carbon dioxide emissions alone.

[Lord Ashton of Hyde (Con)]

My Lords, the Chancellor keeps all fiscal instruments under review. Any changes are announced at the appropriate time.

[Lord Brabazon of Tara (Con)]

I congratulate my noble friend on that Answer. The Budget will be with us shortly, but will the Chancellor bear in mind that the present system strongly favours diesel cars, whereas we now know that nitrogen oxide emissions are far more harmful than CO₂ emissions? Will the Government consider moving to a system that takes emissions of both gases into the equation? While they are about it, will the Government look at the testing regime? At present, this is a laboratory-based system, which bears little relationship to what one actually gets out on the road.

[Lord Ashton of Hyde]

My Lords, the Government do not explicitly promote diesel cars. The current tax system, introduced in 2001, covers the purchase of cars with low CO₂ emissions, regardless of whether they are petrol or diesel. I hope I can be a little more helpful on my noble friend’s question about testing. I am pleased to report that work has been going on for some time, at European and international level, to provide better testing. Although they will still be laboratory tests—so that they can be replicated around the world—a more accurate database will be included, which will more accurately simulate actual driving conditions.