U.K. Will Hike Taxes on Older Diesels

The British government plans to raise taxes on older, higher-pollution diesel vehicles beginning next April, Reuters reports.

Finance Minister Philip Hammond says the move will fund a £220 million ($292 million) Clean Air Fund to help pay for local efforts to improve air quality.

Drivers in the U.K. pay an annual vehicle excise duty that begins with a first-year fee indexed to their car’s EU emission certification level. Then they pay a single flat rate for all diesels thereafter.

The government’s plan would raise the first-year fee by between £20 ($27) and several hundred pounds depending on vehicle size. The measure also would increase the fixed annual fee by 1%.

Health groups have been urging the government since February to raise the first-year fee to reduce the incentive to chose diesels at all. The U.K. declared in July that it would implement an outright ban on any type of piston-powered vehicle by 2040.

Air pollution costs the U.K. £28 billion ($37 billion) and causes 40,000 premature deaths per year, according to a government estimate.​​