Taxes and threats of taxes hammer diesel car sales in UK

The UK car market was doing well before the Brexit vote, and continued to grow  after the vote. September 2016 with the new registration  letters was a very strong month at 469,696 newly registered cars. July and August had also been good compared to previous years.

September 2017 was a much weaker month, at 426,170. July and August had also been considerably weaker than a year earlier.  The sales and output figures show that the car market fell off a tax cliff in April 2017 of the UK Treasury’s own making.  April 2016 saw 189,505 new cars registered. April 2017 saw this drop away to 152,076. The new high rates of Vehicle Excise duty for dearer cars, the general attack on diesels, and the threat of further future tax and regulatory action against diesels led to a sharp fall in diesel car sales.  Over the year to date this year diesel sales are 28.7% down on the same period in 2017 which included three good months before the new taxes.

I was sorry to learn that as a result Jaguar are putting some people onto three day working at Castle Bromwich for the balance of this year. Jaguar Land Rover have a very high proportion of diesel cars in their sales mix, so they have been particularly badly affected by these tax changes and anti diesel policies. The government should think again about its vehicle policies. It spent a lot of time getting investors into the UK to make diesel car engines and whole vehicles, and into regulating diesels to make sure modern diesels meet high standards over exhaust gases and particulates. This appears to be a tax rise too far, as it is now doing damage to jobs and car making in the UK.


  1. Ian wragg
    September 19, 2018

    And Eeyore wants to raise even more taxes to create a recession and blame Brexit.
    He really should 6in Cables party.

    1. Lifelogic
      September 19, 2018

      Not just more taxes, more regulations, more tax complexity, more green crap, mare banking restrictions, taxes on landlords and thus tenants on profits that are not even being made ……. the man is a menace to the economy and confidence.

  2. Mark B
    September 19, 2018

    Good morning

    But will the UK Government be able, either now or post BREXIT, to change the policy. It seems the government and parliament is waging all our war against the motorist.

    The slowing of the car market presents a good oppotunity for those wishing to exploit an increase in competition. We must also not forget that non-UK based manufacturers will probably suffer also. Although to what extent is unclear as yet.

    Once again, to use BREXIT or any other false excuse shows absolute cowardice on the part of the government. Any government that has continually acted against the interests of the UK is no government worth keeping.

    1. Anonymous
      September 19, 2018


      Conjours up images of a privileged and wasteful Toad of Toad Hall. Most drivers do not want the onerous liabilities of owning and running a car. Sadly there are few alternatives for most. They have to be flexible in order to remain employed and paying taxes.

  3. Edward2
    September 19, 2018

    In addition to these nehative egfectd on tje car industry we have several major vities warning they will soon introduce clean air zones like London’s congestion zone.
    My nearest city is warning of £10 or £15 per day for cars they define as dirty and up to £100 per day for HGV’s
    And a the boundaries of the controlled zone is aslo undefined.
    Many, like me, are delaying buying a new car until they reveal their final rules.

    1. Edward2
      September 19, 2018

      Apologies for my poor typing.
      New phone and on public transport.

    2. Anonymous
      September 19, 2018

      Yet again spanking people who make the effort to get work far away.

    3. hefner
      September 19, 2018

      Ouch! Sad to see the early effects of pollution.

      1. Edward2
        September 19, 2018

        Your usual rudeness hefner.
        Nothing to say on the subject?
        Then maybe keep quiet.

    4. Bob
      September 19, 2018

      As far as May & Hammond are concerned the diesel taxes have had the desired effect, they’ve created a slump in sales that the BBC and the rest of the Remainstream media can blame on Brexit.

      How long will it be until people are thrown in jail for telling the truth?

      1. Lifelogic
        September 19, 2018

        How long will it be until people are thrown in jail for telling the truth? Oh we have that already in many countries. The truth is very dangerous. Even saying something true like not may women choose to study physics, further maths or computer studies at A level will get you into hot water as a politician. Or saying some low skilled and benefit led immigration is a huge net liability to the economy.

        In the UK we now have rules to protect religions from criticism and discrimination (religions who so often specialise in telling absurd lies and indeed in discrimination).

        Is it not rational to discriminate against people who have fallen for rather daft belief systems?

  4. The Prangwizard
    September 19, 2018

    But he’s your Chancellor and she’s your PM. Your party. Do you still feel at home? I’m concerned they are Hell bent on ruining our country with their deviousness and stupidity if that’s what it is. If the policy doesn’t change I dare say some companies will indeed want to go elsewhere and they will get their wishes. Let’s hope that doesn’t happen and May is by some miracle removed.

    There could be some small benefit from the subversion if the companies sell even more overseas.

  5. Lifelogic
    September 19, 2018

    Why spend a fortune on a new cars that might well be banned or taxed out of cities by politicians. Far better to keep running an older car even if it does use a bit more fuel. Second hand cars are so cheap and are often simpler and more reliable too.

    It is uncertainty that is killing the market. This and the fact that electric cars are too expensive, take too long to charge, need off street parking and have a very limited range with current battery technology. They are not even good for the environment taken in the round.

    1. fedupsoutherner
      September 19, 2018

      LL. Indeed. With Storm Ali in progress here in Scotland and power cuts all over the place an electric car will be next to useless. A bit like this government.

  6. George Brooks
    September 19, 2018

    The downturn in Jaguar production only gets mentioned by the BBC and others when reporting another item of Brexit news. This is because our selfish short sighted Chancellor is trying to bring about his Project Fear predictions in an effort to stop our leaving the EU.

    The quicker we get a change of PM the quicker we can get rid of him and start to repair the damage he is causing.

  7. agricola
    September 19, 2018

    Were I a conspiracy theorist I would say it is all part of Hammond and the treasury trying to ensure their predictions on the economy post Brexit. As it is I will be generous and assume it is a bunch of philosophy and history students opening mouths before engaging brain. The lack of technical expertise around government is appalling when you consider that we are living in a technological age. This is why I emphasise that this negative useless mob must have nothing to do with government post Brexit.

  8. Alan Jutson
    September 19, 2018

    Cars with a recommended listed sale price of over £40,000 have ben hammered by the high vehicle excise duty for the first few years, even if sold at a considerable discount, which then brings the actual price below that threshold, the same charges still apply.

    Given most of Jaguar /LandRovers cars are above that threshold it is clear they will suffer more heavily than other less expensive manufacturers.

    Diesel scares, and town centre charges are another reason.

    Once again its the Goose and Golden egg, coupled with the actions of human nature, something few Chancellors seem to understand or comprehend.

    1. Lifelogic
      September 19, 2018

      Hammond is indeed strangling the golden goose. He attacks non doms, the gig economy, landlords, tenants, people who buy houses, car drivers, people who insure, people who use private medicine, people who have pension pots, people who have children but earn over £50K, people who work hard ….. indeed almost everyone unless you actually leave the country or work illegally for cash in hand.

  9. ChrisS
    September 19, 2018

    The irony is that the latest diesel engines are not going to be banned from city centres because they are so clean and we must remember they produce far less CO2 than petrol engines.

    Most petrolheads like me understand the issues and we already know that when the wholesale switch to petrol results in much higher CO2 levels, that fact will then dawn on politicians who will panic and introduce another whole lot of extra taxes to discourage people from running petrol cars !

    In the meantime these same politicians continue to encourage the manufacturers to go at full speed down the cul de sac which is the full electric car. The batteries require exotic metals, take a lot of energy to build and are difficult to recycle. They are certainly not very green. It is impossible to generate enough electricity to power them all and whatever technological progress is made, how do you charge them all when so many are parked in the street ?

    In the UK we would need to build five or six Hinkley Points just to power the cars when the real problem is trucks and the exploding numbers of delivery vans.

    The only real long term solution is the Hydrogen Fuel Cell car. That requires no batteries at all, has no charging or range issues and is 100% green.

    1. Stred
      September 20, 2018

      Then another 5 nukes to power heating on top of the 5 for cars. Hydrogen leaks from gas mains and would have to be distributed by tanker. Meanwhile, we will have wind and gas producing CO2, which means that all-electric cars produce as much of it as hybrids or smaller diesels and petrols 20% more.

  10. Andy
    September 19, 2018

    JLR, Honda, BMW.

    It’s not just its diesel policy. The government should think about its Brexit policy – which is the biggest thrreat the UK car industry has ever faced.

    But, of course, in Brexiteer world the people who actually run the car industry – employing hundreds of thousands of people – don’t know anything about their own businesses.

    1. libertarian
      September 20, 2018


      Heres a tip. Go and READ the websites of JLR and BMW in the UK, then come back and tell us what they ACTUALLY say.

      The thing is in a Remainer world you regurgitate what you read in the Guardian , Independent and in your Facebook echo chambers and you think its reality , some of us actually check what was really said.

  11. Stred
    September 19, 2018

    The campaign against diesel is continuing. The team at QM have found carbon particles in placenta in their area. No direct links have been found to intelligence in children and this area has has huge change in demographics.
    This week the Guardian leads on a 40% increase in Dementia for people living in areas with high NOx. Readings down the research found a 7%! Increase over 130k patients and the absolute % was 1.7%!.
    They admit that they cannot link NOx directly. Hardly surprising when there are PM and other pollutants, and 60% are from brakes, tyres and fires etc and 50% is background NO2. Also, the highest at risk by far are women. The most exposed are professional drivers and most of these are men.

    Never mind the facts though, the green NGOs are already telling us that electric cars have to replace ICE cars now, or we will have a major dementia increase. Presumably, 1.7% *7%, as guessed in a study which ignored other factors. JLR had better sell off their stock of cars to countries like Japan and Nigeria which drive on the left and have more intelligent civil servants.

    1. Stred
      September 19, 2018

      The fact that there has been a huge reduction in all pollution over the last 40 years is never mentioned. Two years ago the amount of NO2 in central London was shown as 5%. Suddenly it jumped to 40% in the latest chart from the campaigners. Looking closely we find that they omit background MO2, which is half, then the figure is an estimate for in 5 years time and the NO2 from buses and lorries is assumed to have been reduced to near zero, so cars are left with 40%, but overall pollution is actually much less. The estimated increase in lifespan having banned diesel is in weeks and days for a person living 80 years their whole life in Central London.

    2. Mark
      September 19, 2018

      I noted the research by Prof Kelly of KCL. It seems odd that when we had three times the level of NOx pollution, we apparently had fewer dementia cases. Then again, I noted he was co-author on an earlier paper ( is the paper reference) which appeared to conclude that long term traffic pollution exposure was if anything negatively correlated with mortality. Sniff an exhaust, live longer! Or perhaps not?

      The unfortunate thing is that much of this research has wide error margins, meaning that the conclusions are dubious at best. Yet conclusions are seized on by politicians and media propagandists to justify absurd prohibitions. In Hammond’s case, at the moment I think he is casting around for taxes to pay the EU’s £39bn bill that he wants to agree to.

  12. Monza 71
    September 19, 2018

    The headlines made by Jaguar and BMW about short time working and factory closures are music to Hammond’s ears because he can blame them on Brexit.

    The truth is the problem is of his, and other minister’s own making.

    We need a coherent, published policy on what kind of cars the government wants us to drive, not in 20 or 30 years time but in the next ten. Given the history ( eg Gordon Brown and diesels ) car buyers are rightly very wary. The ridiculous levels of VED, particularly on mid range cars with a list price of £40,000 or more have made the situation much worse.

    I would like to replace my main car but won’t because of Hammond’s policies. I simply do not trust the man, or his boss for that matter. They both need to be gone ASAP.

    I will carry on driving my Audi A5 Sportback which has 75,000 miles on the clock and continues to run flawlessly. By doing so, I have deprived the Chancellor of at least £15,000 in VAT and VED this year.

    I would probably have replaced it with a Jaguar.

  13. Adam
    September 19, 2018

    The driver of taxes at the Treasury keeps failing his test.

  14. Newmania
    September 19, 2018

    As I have said before Diesel is dead . It is being used as an excuse but I cannot se hwo motor can survive Brexit , maybe I`m wrong but this is basically the Uk is now the worst place in the EU to do business in Europe
    What Public sector scribblers like Mr Redwood do not have in their bones is the sense of competition, he after all can drift along doing something or other for years .Ina competitive environment you cannot afford to be second best , never mind a “special ” country rapidly turning into an unfunded old people`s home.

    The smell of decay is in the air

    1. libertarian
      September 20, 2018


      Do you never do any research ? Do you believe everything you hear in your echo chamber? Why has every UK based motor manufacturer INCREASED investment, opened or planning to open new production lines and according to SMMT increase their UK component sourcing from 25% to 40% ?

      The worst place to do business in Europe , really? I’m just laughing at you now

  15. fedupsoutherner
    September 19, 2018

    Well, we’ve just bought a new car and been clobbered by the taxes. Living in a rural area with 30 miles to the nearest major town electric isn’t suitable or affordable for us and many others. All these costs for commercial transport including white van man will be passed on to the customer. Hammond is an idiot, traitor and no good for this country. Together with May they are a right pair of numpties.

    1. Lifelogic
      September 19, 2018

      Numpties is far too nice a word for them. They are total economic idiots who are going to give us the evil Corbyn/Mc Donnall/SNP trip to Venezuela if they are not stopped very soon.

      May now wants to give us more housing “apartheid”. Subsidies for a few social housing tenants this while house buyers and private tenants are taxed to the hilt by Hammond’s stamp duty and double interest taxation. What has she got against tory supporters?

  16. A.Sedgwick
    September 19, 2018

    The CEO of JLR blamed Brexit for its problems but they have made a few strategic market mistakes, the main one is putting too many eggs in the diesel basket. To my own cost this year I have experienced the weakness of diesel cars – they are only reliable if used for high mileage otherwise even with sensors, flaps, filters and other devices they will clog up with particulates unless burnt off by driving long distances = pollution. Regardless of your points the market is waking up to the limitation and complication of diesel engines. I now have a petrol car for my mainly short journeys.

  17. fedupsoutherner
    September 19, 2018

    Meanwhile, Theresa May looked very comfortable in her large car the other day. Why tax the newer vehicles? They are cleaner than ever. They should be encouraging people to trade in their older vehicles which are much dirtier. Everything this government does lately penalises those that have worked hard and penalises the general economy. I don’t suppose those workers at Jaguar Land Rover will be wanting to vote for your party John. Meanwhile, in the real world everyone is getting on with life and their economies aren’t suffering in the way ours will. Still, just think, we are saving the planet!!

    1. Lifelogic
      September 19, 2018

      Saving the planet – the new bonkers climate alarmist religion endlessly pushed by the BBC is totally unscientific. Only daft art graduates, people on the make from green crap subsidies, politicians and religious leaders seem to fall for it.

      Few sensible physicist believe a word of it.

      1. fedupsoutherner
        September 19, 2018

        LL I hope you realise I was joking when I commented about saving the planet. I think the same about green crap as you do especially as I have to look at hundreds of ugly wind turbines every day. They were off today because of the high winds. We had power cuts. So much for electric cars. You can’t top your batteries up without power. Utter madness. I bet electric cars don’t last as long as diesel engines.

  18. Sakara Gold
    September 19, 2018

    Part of the problem with diesel vehicles is that a number of engine manufacturers installed software that detected when an emissions test was underway and fixed the results.

    As a result, diesel vehicles driving on our roads do not comply with emissions standards. We should be sueing these manufacturers, as are the Americans. Unfortunately, the public resents being conned in this way and has voted with their feet; the vehicle related air pollution in London – and the SE generally inside the M25 – has reached unprecedented levels and the public has noticed this too.

    Maybe JLR could develop and introduce a range of electric vehicles and get them on our roads ASAP, as indeed the government wants.

    1. Original Richard
      September 19, 2018


      The “number of engine manufacturers” were all German.

      We were not able to sue them, as could the USA, because we are members of the EU.

      In fact the US not only sued for compensation but sent one car manufacturing executive to jail for 7 years.

      Fortunately we will very soon be a third country like the USA and will have our own testing operations to detect when our consumers are being conned by such massive EU frauds and also be able to sue for compensation

    2. Stred
      September 20, 2018

      According to the statistics publishes by the ministry and Kings College, NO2 has stayed st about the same level for 20 years and PMs have reduced since filters were introduced 12 years ago. The cort cases have been brought because EU limits were lowered and WHO levels lowered eben more. The so called deaths from air pollution are obtained from guesstimates on lowered lifespan for the average person then multiplying this by the whole population, which gives a figure like 9k pa for London, but these are not actual people. We die for multiple reasons and air pollution, which used to be much worse, is a small %
      Intelligent people need to look carefully at the green propaganda.

  19. oldtimer
    September 19, 2018

    The Chancellor, like many of his predecessors, seems clueless about the impact of his policies of those who work in the industry and those who have invested in good faith in recent years. Furthermore every Project Fear statement he makes is calculated to discourage investment still further.

    It should be noted that Jaguar’s sales problems are exacerbated by a global relative decline of saloon car sales versus the growth of SUVs. Jaguar was a late, and seemingly reluctant, entrant to the SUV market with its F-Pace and E-Pace models. And some think that the interiors of all their models, saloon and SUV, are behind the competition.

  20. GilesB
    September 19, 2018

    How much do EU lorries pay for using the U.K. as a land bridge between Ireland and the Continent?

  21. georgeP
    September 19, 2018

    Let’s say it- the whole of industry is upset because of this on-going uncertainty.. Government is not functioning well or as it should ..let’s hope some of this uncertainty will be removed over the next few weeks and that some good can come so that we can get back to some kind of normalcy..

    It is clear now that successive governments, political parties makeup and Parliament are not functioning or serving us well..we really need to have a good look at how we do political business in this country- a change of voting to the PR proportional representation system rather than first past the post might be a start..

  22. Alison
    September 19, 2018

    One of the problems with diesel cars is the fraud within some car manufacturers, notably German car manufacturers, manipulating software to show diesel emissions within acceptable range. Without that fraud – only discovered years later – I am sure diesel vehicle manufacturers would have developed technology to reduce emissions. Or they would have changed their production and sales strategy.

    It is infuriating that a CEO (German) of a big car manufacturer in the UK blames Brexit for very sluggish sales (he’s also glossing over the poor reputation of some newer models I’ve heard many mention and I believe in the press .. up here in rural Scotland the new Landrover-type cars are not from JLR, they are from SE Asia … poor performance, cost ..). The media then leap on the opportunity to lay all blame Brexit.

    The Frankfurter Allgemeine was not slow to join in yesterday. In my letter to them I shall also mention that diesel fuel is more expensive in the UK than petrol, whereas petrol is more expensive in Germany. I might also remind them about the sins of some of executives in some of their car firms.

  23. acorn
    September 19, 2018

    Over the first eight months of 2018, passenger car registrations across the EU grew by 6.1% to reach 10.8 million units, largely boosted by the unusually strong performance during the summer months. Looking at the major markets, demand went up in Spain (+14.6%), France (+8.9%) and Germany (+6.4%), while car sales remained stable in Italy (‐0.1%) and contracted in the United Kingdom (‐4.2%). (Reuters)

    A lot of pre-WLTP inventory had to be shifted before 1/9/18 (Worldwide Harmonised Light Vehicle Test Procedure). Hence there were a lot of brand new second hand cars available.

  24. rick hamilton
    September 19, 2018

    Hammond – like Brussels – seems to have no concept of motivation or incentives and can think only in terms of tax, more tax, more tax on top of tax and ever more regulation. What’s the point of leaving the EU when our own government is determined to punish vehicle users, private landlords, small retailers, property buyers and sellers, those who save for retirement and those who dare to die ?

    If the Conservatives continue to bleed dry their own increasingly angry natural supporters then why should anyone vote for them. As May seems determined to force Chequers on us before going down in flames, the worm will turn in a big way.

  25. Christine
    September 19, 2018

    The attack on diesel and car sales by Hammond is just more ammunition to stop Brexit. This man would ruin our country just to thwart the Brexit vote. Enough is enough. Get rid of May, Hammond and Carney before they can damage our country further. We all know the real reason for increased pollution is the number of cars on the road fuelled by the huge rise in the population. Soon we will have to wear facemasks like they do in China.

  26. Dan H.
    September 19, 2018

    One simple change to the regulatory environment here would make a huge amount of difference: alter the law such that all traffic, parking and emissions fines and penalties are paid to Central Government and not to the local council that is imposing them.

    This stops councils setting up a structure of, for example, parking fines as a profit centre into one to be used only to modify behaviour of people. It is a simple change which the councils will not argue against if they know what is good for them, but merely quietly bemoan the ending of a nice racket.

  27. libertarian
    September 19, 2018

    I’m not sure the workforce at Castle Bromwich will be upset , They’ve been give a part holiday for two months, as the three day week up until Christmas is on Full Pay

    Tom Watson and Remainers were wetting their pants over this on Twitter , no matter how many people told them the facts they kept repeating the same fake news. I think Remainers are losing the argument because of their continual lying

  28. DUNCAN
    September 19, 2018

    You can almost ‘see’ JLR executives sat around a table in Whitehall with Hammond’s lackeys and Brexit hating civil servants planning how to generate a series of events that all point inexorably to the conclusion that Brexit is bad for the UK economy

    I believe Brexit hating politicians in govt, senior executives and civil servants would actually like to see unemployment rise and people lose their jobs to make a political statement

    This is how far we have fallen. Propaganda and the incitement of fear is now the chosen tool of the Europhile elite

  29. Edwardm
    September 19, 2018

    The composition of diesel exhaust and its effects and acceptable levels have been known about from before the government encouraged the move to diesel. So why governments didn’t stop encouraging diesels (made to the lower standards achievable at the time) gradually from years ago I don’t know. To suddenly highly tax diesels that meet the latest low emission standards makes it impossible for manufacturers to recoup development costs and gives uncertainty that other anti-business decisions won’t happen in the future.
    The government is displaying a bipolar disorder. The accumulative problem is due to Brown, Osborne and Hammond, all well past their sell-by date.

  30. MikeP
    September 19, 2018

    Ah, but were the Treasury’s moves to make diesel less attractive a cack-handed way of hurting German and French competition, given they sold us more than we sold them, leading directly or indirectly to them fiddling their emissions tests ? Either way it didn’t bloomin’ work.

  31. a-tracy
    September 19, 2018

    It is the taxes but also the threats, governments saying the UK won’t be able to get replacement parts etc. who wants a German and French cars and vans if they’re going to start holding things up in ports to fix our cars, I think people are just waiting to see what else is on offer and holding on to their old vehicles for longer, if we start having problems with parts it will be the last French and German vehicles we buy.

    The Japanese makers in the UK making cars for the UK market could get their acts together here, perhaps we shouldn’t have just sold Rover and BMW Mini up closing down all our wiring and loom and part manufacturers in the UK, perhaps we should tool up to get more self-sufficient again if the EU27 wants to ‘punish’ the UK as Angela Merkel has been reporting as saying this week. Stop wasting time, approach UK car manufacturers and report on their solutions and what they are marketing for UK consumers.

  32. Simon Coleman
    September 19, 2018

    You never miss a statistic…except perhaps the latest inflation figure. You predicted that the inflation blip (that had nothing to do with Brexit of course) was over. Now it’s at a 6 month high. You’re the great economic prophet, so what’s gone wrong?

    Reply I have checked my last 3 pieces on inflation, including one explaining a quite high 2.7 figure. None of them made a prediction of further falls, so please dont lie about my views

  33. Tony Hammond
    September 20, 2018

    We have an estimated 7% of all cases of dementia due to the biological effects of diesel fumes (37423 of 534621 total UK dementia diagnosis).
    Those are historic cases – from when diesel fueled just 10% of traffic in 1996.

    But diesel fuels 40% of all UK traffic today. Some car firms have never resisted a chance to cheat hand in hand with their government and rig EU rules regarding toxic fumes. The Americans caught them out, not us or the EU tests.

    The current rate of diesel dementia cases is therefore est. 0.34% of the whole UK population of over 64’s – 37,423 cases.

    Today, 40% of all traffic is diesel, so, adjusting for the increase – est. 1.27%
    of the whole population of over 64’s will have diesel dementia in the future.

    By 2026 we will have 14,317,921 over 64’s.
    if 1.27% of them have diesel dementia due to the extra traffic and fumes thats approaching 181,380 cases. Staggering figures.

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