Diesels will be taxed off the roads in other ways. The London ULEZ doubles the congestion charge on most diesels more or less.
A flat rate VED really had to be introduced as it was noticed in the second hand car market the higher tax cars were basically being scrapped when they weren't that old. Which is what a lot of people said would happen. First owners are well off. By the time you get to the average 4th owner they aren't. Having a £500 car which costs £500 to tax is never going to be anything other a drive to a scrapyard or get driven illegally. £140 is reasonable. It will be interesting to see how long it stays at that and whether it is increased over time and whether EVs also end up paying VED.
A lot of roads are in diabolical condition so road tax really needs to be spent on roads. Most journeys are by road and most goods arrive by road so it needs the money to be spent.