VW scandal: Carmaker could be subject to heavy fines, says Transport Secretary

Patrick McLoughlin tells MPs the Government 'obviously wants to look at' possibility of exacting financial penalties from VW

Volkswagen is already facing fines of up to $18bn in the US for the emissions scandal, with European countries also considering their options (Rex)

Volkswagen (VW) could be subject to heavy fines in the UK, the Transport Secretary has said, as the head of the company’s business in the UK conceded no taxpayers should be left out of pocket as a result of the diesel emissions scandal.

Patrick McLoughlin has told MPs the Government would “obviously want to look at” the possibility of exacting financial penalties from the company. In the USA the Environmental Protection Agency has powers to fine companies not complying with clean air rules up to $37,500 per vehicle, with VW expected to face billions of dollars in costs.

It is not yet clear what legal powers the UK Government could use to seek compensation from VW, but Mr McLoughlin told the Transport Select Committee that the Secretary of State could prosecute if manufacturers were found to have provided false information to vehicle certification authorities.

VW had behaved “in an appalling way”, he said. Around 1.2 million vehicles in the UK are believed to have been affected by the scandal, and will require either new software or re-engineering during re-calls that are set to commence in 2016.

It is fairly unbelievable that a company the size and reputation of VW has been doing something like this

&#13; <p>Patrick McLoughlin</p>&#13;

“It is fairly unbelievable that a company the size and reputation of VW has been doing something like this and finding ways around regulations,” Mr McLoughlin said “I think they are going to suffer very substantial damage as a result of it and they deserve to quite honestly.”

Paul Willis, the managing director of Volkswagen Group UK has apologised “unreservedly” (PA)

Appearing before MPs, Paul Willis, managing director of Volkswagen Group UK apologised “unreservedly”. He said he had not been aware of the problems until they were reported in the media in the US last month.

He said the British taxpayer “should not be out of pocket” as a result of the scandal but said it was “premature” to assume that customers would suffer a decrease in their car’s value. Any customers inconvenienced by the re-call of their vehicle would be provided with a loan car, he said.

Volkswagen is expected to face fines of up to $18bn in the US with European countries also considering their options. In the EU, the UK is the second worst-affected country after Germany.