Drivers of diesel cars that do not meet the latest environmental standards will face paying higher road tax under plans to establish a "clean air fund", Chancellor Philip Hammond has announced.
Mr Hammond insisted that "white van man" would not be hit by the measure, which will only apply to cars, with the money used to support a £220 million plan to improve air quality.
The Chancellor also used his financial statement to set aside another £3 billion to prepare for "every possible outcome" in the Brexit process as he vowed the UK would seize the opportunities of leaving the European Union.
The first year vehicle excise duty rate for diesel cars that do not meet the latest standards will go up by one band from April 2018 and the existing diesel supplement in Company Car Tax will increase by one percentage point.
"Drivers buying a new car will be able to avoid this charge as soon as manufacturers bring forward the next-generation cleaner diesels that we all want to see," Mr Hammond said
Mr Hammond's Budget takes place against a grim economic backdrop, with the Office for Budget Responsibility downgrading its growth forecasts as a result of poor productivity.