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What could paying people to scrap their diesel cars mean for business?

PUBLISHED: 20:00 26 April 2017 | UPDATED: 21:10 26 April 2017

A diesel scrappage is being considered by government. Picture: Lewis Whyld/PA Wire

A diesel scrappage is being considered by government. Picture: Lewis Whyld/PA Wire

An incentive to remove older diesel vehicles from the road could bolster the car industry, say East Anglian industry experts – but bad publicity is already hitting sales.

The government is eyeing a diesel scrappage with the topic discussed by a select committee before the snap election announcement put the scheme to the side of the road. MPs have said a plan would most likely be based on postcode and apply to lower earning households. A toxin tax has been mooted which would hit diesel drivers in the most polluted cities and Norwich, which suffers from high levels of nitrogen dioxide, could be included.

Grant Long, managing director of Norfolk Motor Group, said a diesel scrappage would boost sales but there would need to be plans made for more recent models which were traded in. He said: “A diesel scrappage would have a positive impact, there are always people who will take advantage of such schemes. “But you are not going to be able to move away from diesel overnight.”

Mr Long added: “Customers have come in and said they don’t want a diesel, even though there is nothing wrong with the newer models.”

Mark Henry, who heads up law firm Birketts’ motor group, said while a scrappage might give a short-term boost to retailers, the current publicity surrounding the fuel was doing harm. “From an industry perspective the fact there has been such negativity around diesel, in terms of the different taxing options, is impacting on the registrations of diesel cars,” he said. “Registrations were down 9.2% in February and over the year to date they are down 5.9%. This whole thing might not be good news for dealers.”

Bad press has come from the Volkswagen emissions scandal as well as growing evidence it produces harmful by-products.

Chairman of the Environment, Food and Rural Affairs select committee Neil Parish said £500m could take 500,000 of the dirtiest cars off the roads.

Taxes on diesel have been discussed, but, as many drivers bought diesel vehicles after government encouragement in 2001, it is a thorny political issue.

Haulage almost exclusively runs diesel vehicles, but Jack Richards Palletways depot principal Dominic Purslow said, due to European legislation and a liquid called AdBlue which cuts emissions, the sector was ahead of the game.

“The truck world is probably running the cleanest diesel vehicles you can find,” he said. “Our vehicles are cleaner than all but a handful of diesel cars on the market because of the standards we have to abide by.”

Analysis: How did we get here?

Back in 2001 diesel was being hailed as a cleaner fuel which did more miles to the gallon than petrol, with the then Labour government subsidising diesel vehicles in an attempt to cut down on carbon dioxid emissions.

However, while the fuel does produce less carbon dioxide, a greenhouse gas, it produces four times as much nitrogen dioxide and 22 times more particulates – both of which are harmful to human health.

A scrappage would be one way for the government to tackle the volume of diesel vehicles, however higher tax for drivers of diesel vehicles has also been mooted.

Many drivers are angry that they were misinformed and in attempting to do the right thing they could now lose out.

It is a problem of which the government is aware and the indications are that Theresa May would rather avoid punishing diesel drivers if possible.

With a general election and Brexit looming the landscape could change and Britain may move away from some environmental agreements, although this does not seem likely.

The Volkswagen emissions scandal, in which the car maker was found to have falsified test results, has further dented diesel’s image and added to the pressure on governments and manufacturers to reduce the environmental impact.

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