Budget: New diesel car taxes to spell end of the road for fleet’s favourite fuel?

Fleet demand for diesel company cars is tumbling and speculation that new taxes will be announced in this month’s Budget could further accelerate the decline of a fuel that on a model-for-model is more efficient than petrol.

In this year’s March Budget, Chancellor of the Exchequer Philip Hammond served notice that the “tax treatment for diesel vehicles” could change as the government looked to cut pollution from the transport sector and improve air quality.

Since then the government has published a plan setting out how the UK’s air quality goals would be achieved notably through a network of Clean Air Zones in towns and cities and encouraging increased demand for plug-in vehicles, while diesel vehicles have been “demonised” in the national media for their emissions and largely taken the blame for the UK’s poor air quality in urban areas.

It has now been reported by the Financial Times (November 9, 2017) that Mr Hammond was considering introducing higher taxes on new diesel cars in the Budget on Wednesday, November 22.

It has been suggested that additional VAT could be levied on new diesel cars or they could be subjected to a new ‘sales tax’.

Such taxes may potentially have to be taken account of in vehicle whole life costings and thus would make diesel company cars more expensive to operate.

Simultaneously, it should have the undesired impact of seeing fleets extended vehicle replacement cycles.

RAC chief engineer David Bizley said:  “We are concerned that those who drive long distances, business drivers especially, might consider sticking with their older diesels given the superior economy they offer.

“It would be a terrible misjudged ‘knee-jerk’ reaction which could backfire and have the unexpected effect of encouraging these owners of older diesels and fleets not to upgrade to newer, cleaner diesels which offer significant benefits in reduced emissions.

“This isn’t what the government, or any of us, want and is the opposite of what is needed from an air quality perspective.”

Further HM Treasury “leaks” have suggested that fuel duty on diesel could rise, while that of petrol is reduced or remains unchanged. As a result, the pump price of diesel would increase and penalising owners and operators of all diesel vehicles – not just new diesel car buyers including commercial fleets reliant on diesel vans and trucks.

Another option that has been floated is for “extra charges” to be levied on anyone who buys a second hand diesel car if they live in an area with high levels of emissions. However, such a move would hit used vehicle values and mean defleeted diesel vehicles could be transported around the country to be sold in “low” emission areas.

Against the background of the government apparently looking to “penalise diesel”, the Society of Motor Manufacturers and Traders has repeatedly highlighted that today’s Euro6 diesel cars are the “cleanest in history”.

SMMT chief executive Mike Hawes said: “Not only have they drastically reduced or banished particulates, sulphur and carbon monoxide but they also emit vastly lower NOx than their older counterparts.”

What’s more, as Mr Hawes highlights, today’s generation of Euro6 diesel cars are recognised as ‘clean’ because they are exempt from the London Ultra-Low Emission Zone that will come into force in 2019.

Additionally, a new report by automotive information providers JATO Dynamics claims that despite the reputational issues surrounding the fuel, diesel engines could produce more power and torque with lower CO2 rates when compared with traditional petrol-based engines.

It highlights that the average power output of a diesel engines registered in the European Union is 142bhp with CO2 emissions of 115g/km. That compared with the average power output of a petrol engine registered in the European Union being 123bhp with CO2 emissions of 122g/km.

Mr Hawes therefore points out that: “In addition to their important contribution to improving air quality, diesel cars are also a key part of action to tackle climate change while allowing millions of people, particularly those who regularly travel long distances, to do so as affordably as possible.”

Mr Bizley added: ““The possibility of a sudden rush [away from diesel] to petrol engines also risks a new rise in CO2 emissions, precisely what previous governments tried to avoid by encouraging drivers into diesel vehicles.”

However, diesel’s status as the “default fleet fuel” could be about to come to an end, according to an analysis of SMMT data by vehicle information provider Glass’s.

Diesel car share of fleet registrations has fallen below 60% every month since November 2016 and its demise is accelerating, according to Glass’s analysis. The diesel share even fell to 50% in August and only recovered to 51% in September, a major barometer of new car registrations due to the number plate change.

Petrol has been the main beneficiary of the switch away from diesel company cars and based on current trends, was set to surpass diesel as the leading fuel among fleet buyers within months, according to Glass’s in its November Monthly Car Market Report.

The decline of diesel cars as a percentage of fleet registrations has been rapid, according to the data. Just two years ago (October 2015) diesel cars accounted for almost 70% of fleet registrations with petrol cars at a fraction above 30%.

Given that diesel cars on a model-for-model basis are more efficient than petrol-engine vehicles and thus produce lower CO2 emissions, Glass’s said: “Although diesel demand is still falling more rapidly among private consumers than fleet buyers, this trend is rather worrying as fleet users naturally cover higher mileage. As it is, there are already concerns that CO2 levels could rise in the UK this year for the first time since average CO2 emissions were recorded and a continuation of this trend will only increase the likelihood of that.”

Fleets must get in gear for arrival of London Ultra-Low Emission Zone in April 2019

Fleet decision-makers in charge of vehicles entering central London must review their replacement programmes to ensure compliance with the world’s first Ultra-Low Emission Zone (ULEZ), which will be introduced on April 8, 2019, or pay the price.

London Mayor Sadiq Khan has confirmed the long-awaited start date of the ULEZ and diesel vehicles that do not meet Euro6/VI emission standards and petrol vehicles that fail to meet Euro4 standard will have pay to enter the area covered by the ULEZ, which mirrors that of the London Congestion Charge.

The ULEZ will replace the recently introduced T-Charge. But – unlike the T-Charge and Congestion Charge, which are only in place on weekdays – the ULEZ will operate 24-hours a days, seven days a week, 365 days a year.

There are two ULEZ charge levels: £12.50 a day for cars, vans and motorbikes and £100 a day for lorries, buses and coaches. Those charges are in addition to the Congestion Charge, so the more polluting cars and vans would pay £24 per day and lorries would pay £111.50 during Congestion Charge hours (discounted for Congestion Charge Fleet Auto Pay registered vehicles).

However, by the time the ULEZ is introduced it is anticipated that very few fleets will be operating pre-Euro6 diesel or pre-Euro4 petrol cars or vans. That’s because Euro6 emission standards came into effect for those vehicles from September 2015 and so even if a fleet is operating a four-year replacement cycle, the majority of vehicles that could potentially be affected may well have been replaced by April 2019.
What’s more, van fleets operating on longer cycles may potentially be able to manage their operations – and avoid paying for non-qualifying vehicles to enter the ULEZ – by swapping vehicles into other areas.
But with trucks operated on much longer replacement cycles than vans it is forecast that there will be many lorries in operation that do not meet ULEZ entry emission standards in April 2019.

The fine for non-payment of the charge if a vehicle does not meet the ULEZ standard is £130 reduced to £65 if paid within 14 days for cars, vans and motorbikes and £1,000 reduced to £500 if paid within 14 days for lorries, buses and coaches.

The area covered by the ULEZ is planned to be extended up to the North/South Circular roads in 2021 subject to a consultation later this year. Additionally, the Mayor is developing proposals for a London-wide Euro6/VI standard for buses, coaches and lorries for introduction in 2020.

John Pryor, chairman of fleet operators’ association ACFO, said: “Firm measures must be taken to tackle poor air quality as there is a link with premature deaths – it’s a really serious public health issue and fleets have a role to play.

“Plans for the ULEZ have been known for a long time – they were originally announced in February 2013 for introduction in September 2020 – and in May 2016 the Mayor first said he was looking at introducing the measure earlier than the originally proposed date. In April this year, the Mayor announced that, subject to a consultation, the ULEZ would be introduced in April 2019.

“Therefore, the fact that the Mayor has confirmed April 8, 2019 as the date of the introduction of the ULEZ should come as no surprise.

“Fleets invariably lead the way in operating the ‘cleanest’ vehicles on the UK’s roads and whilst this timescale may well present some operational and cost challenges for some businesses, we have to move forward and play our part in tackling this very serious public health issue.

“Fleets still have time to make vehicle replacement decisions if necessary and it may also be the case that some vehicles, particularly vans, are reassigned if possible so they operate on routes outside the ULEZ if they do not meet the qualification criteria.”

Meet the team – Isabel Wight

Job title:  Claims Handler, Service Support Team

Explain your role in 10 words:  Handling all aspects of accident claims and supporting the business!

What’s the best aspect of your job?  Getting involved in all aspects of the accident process from start to finish……. also the team I work with – they’re not a bad bunch 😉

What’s the worst aspect of your job?  Worst case scenario call! …serious injury/fatality!!

How long have you worked at Fleet Service GB?  Coming up to one year in November! 😊

What was your first paid job?  I did the weekend paper round in the village that I grew up in!

What’s your favourite car?  Mercedes A-Class (I’m such a girl)

What one thing would you like to achieve before you retire?  See as much of the world as possible!!

Outside of Fleet Service GB, what would your dream job be?  I’d love to be a singer (if I could sing…sadly I can’t to save my life!!)

Who in the world would you most like to meet? Tom Hardy and/or Will Smith …. they are both legends (and easy on the eye  😊)

What is your favourite way to spend a day outside of work?  Shopping and spending time with the girls usually eating and drinking!!

If you won the lottery how would you spend the cash?   The usual…house, car, holidays (lots of travel) and share with some family and friends!!

Not a lot of people know that …………………… I have a tattoo of a slice of pizza!! 😊

Hauliers may switch to vans to comply with ULEZ entry criteria as focus shifts to ‘last mile logistics’

London’s Ultra-Low Emission Zone (ULEZ) is designed to improve air quality, but there are fears the initiative may be counterproductive – and also increase traffic congestion – with the number of vans operated by some businesses rapidly increasing.

That’s because some fleet operators may replace introduce smaller vehicles to their fleets in place of HGVs that do not meet the strict ULEZ entry criteria.

The £100 per day charge for operating non-compliant trucks inside the ULEZ is potentially viewed as a major disincentive so, it is possible, that one alternative option may be the introduction of so-called ‘last-mile logistics’ that will see businesses transfer loads from non-compliant trucks to compliant vans for delivery in central London.

However, that could result in more vehicles operating inside the ULEZ giving rise to an increase in vehicle emissions and traffic congestion – both issues that London Mayor Sadiq Khan is trying to reduce with the introduction of the ULEZ and other transport measures.

The Road Haulage Association (RHA) said it was “outraged” at the decision to introduce the ULEZ 17 months earlier than the originally planned September 2020 date and accused Mr Khan of “closing London for business”.

RHA chief executive Richard Burnett said: “It is essential that a realistic implementation date and appropriate phasing is established and adhered to. The current approach will lead to the use of more vans, will increase congestion and will undermine the economic wellbeing of the city. Given the switch to vans, there is even a strong possibility that the Mayor’s plans could make air quality worse.

“Hauliers and the people and businesses of London should not be penalised by this retrospective regulation that is little more than a tax grab by the Mayor.”

The RHA lobbied for a “phased approach” to the introduction of the ULEZ with businesses given more time for a higher proportion of the lorry fleet to be Euro VI ultra-clean trucks.

Highlighting that more than half the GB lorry fleet would not be Euro VI compliant when the ULEZ is introduced on April 8, 2019 and that all trucks registered before 2014 would face heavy fines, the RHA said HGV replacement cycles were typically 12 years meaning that Euro V emission lorries would be just five to nine years old when the ULEZ was introduced and should therefore have been excluded from the entry standard.

The RHA also believes that the Mayor’s bid to develop proposals for a London-wide Euro6 standard for buses, coaches and lorries for introduction in 2020 will result in businesses introducing more vans that could ultimately increase congestion and worsen air quality across the capital.

The British Vehicle Rental and Leasing Association (BVRLA said it was “disappointed” that commercial vehicle operators had not been given enough time to prepare for the early introduction of the ULEZ. In its consultation response and meetings with Transport for London, it had called for “special consideration” to be given to commercial vehicle operators, particularly SMEs.

Freight Transport Association (FTA) head of policy for London Natalie Chapman agreed that the Mayor had “failed to take into account the time needed for businesses to comply with these new regulations, without incurring significant costs that could put real strain on overheads and business security”.

Commenting on the Mayor’s decision to consult on extending the ULEZ, widening to the North and South Circular Roads for light vehicles, and London-wide for heavy vehicles, including lorries, coaches and buses, Ms Chapman said: “This announcement fails to take into consideration the huge strides the freight industry has taken in meeting new emissions standards.

“London’s businesses and homes will still need to be supplied with products every day, if the city is to continue to trade efficiently in increasingly difficult economic circumstances, yet there is no allowance made for the freight operators that supply them.

“This is simply a tax on freight, which will have repercussions for business profitability and longevity across the capital at a time when we believe the sector deserves support to continue its efforts to achieve ever cleaner air for the city.”

Killer drivers face life in prison as government bows to campaigners’ calls

Killer drivers face life behind bars after ministers confirmed plans to introduce tougher sentences for those who drive irresponsibly and devastate lives.

The government’ further toughening of prison sentences for rogue drivers further turns the spotlight on at-work driver safety and management focus on occupational road risk management in respect of both company-provided and privately-owned vehicles driven on business journeys.

The Ministry of Justice, following a public consultation and resounding support from families and road safety campaigners, will:

  • Introduce life sentences for those who cause death by dangerous driving (up from a current maximum of 14 years), and for careless drivers who kill while under the influence of drink or drugs driving (up from a current maximum of 14 years)
  • Introduce a new offence of causing serious injury through careless driving.

Ministers said that drivers who caused death by speeding, racing, or using a mobile phone could face sentences equivalent to manslaughter, with maximum penalties raised from 14 years to life. Legislation required for the measures is expected to be brought forward as soon as parliamentary time allows.

Referring to the new offence of causing serious injury through careless driving, the Ministry of Justice said it intended to give further consideration to the maximum penalty and to bring forward proposals to create the new offence when parliamentary time allowed.

Justice Minister Dominic Raab said: “We’ve taken a long hard look at driving sentences, and we received 9,000 submissions to our consultation. Based on the seriousness of the worst cases, the anguish of the victims’ families, and maximum penalties for other serious offences such as manslaughter, we intend to introduce life sentences of imprisonment for those who wreck lives by driving dangerously, drunk or high on drugs.”

On the new offence of causing serious injury by careless driving, Mr Raab said: “We will introduce a new offence of causing serious injury by careless driving, punishable by imprisonment, to fill a gap in the law and reflect the seriousness of some of the injuries suffered by victims in this category of case.”

The consultation sought views on whether current maximum penalties available to the courts should be increased. A total of 90% of respondents thought there should be a new offence of causing serious injury by careless driving. They noted that without a specific offence which reflected the harm caused, offenders could only be convicted of a careless driving offence that had a maximum penalty of a fine.

Last year, 157 people were sentenced for causing death by dangerous driving, with a further 32 convicted of causing death by careless driving whilst under the influence.

FSGB customer shortlisted for top fleet award

Steve Mulvaney, head of fleet at VPS UK, a long-standing Fleet Service Great Britain (FSGB) customer, is in the running for a top industry award.

Mr Mulvaney, who is in charge of a fleet comprising 488 light commercial vehicles, 79 company cars, four HGVs and 40 items of plant and machinery, including trailers, is a finalist in the Fleet Manager of the Year category in the 2018 What Van? Awards.

Additionally, Manchester-headquartered VPS UK, which specialise in securing, maintaining and managing more than 50,000 vacant properties across a wide range of customer and industry sectors including retail, pubs, social housing, commercial property and construction sites, is one of three fleets shortlisted for the publication’s Service, Maintenance and Repair Award.

The winners of the 2018 What Van? Awards will be revealed on Wednesday, December 13 at The Brewery, London.

Mr Mulvaney and VPS UK have notably been recognised for major vehicle service, maintenance and repair cost savings – which are expected to ramp up further following implementation of a robust driver compliance initiative – being achieved in partnership with FSGB.

Driver influenced costs are the single largest drain on a company’s in-life fleet vehicle expenditure, which is why, following a change in senior management, Manchester-headquartered VPS continues to work with FSGB to transform its fleet into ‘best in breed’.

Read the full case study here