London Mayor unveils van scrappage scheme for small businesses

London Mayor Sadiq Khan has today (18 December) unveiled plans for a new £23m van scrappage scheme, aimed at helping small business owners switch from old diesel vehicles to low-carbon alternatives.

Under the scheme, London-based businesses with ten employees or less will be offered grants in exchange for scrapping vans which do not meet the requirements of the capital’s Ultra-Low Emission Zone (ULEZ) programme, which launches in April 2019.

Only businesses which regularly operate within the ULEZ using diesel vans that do not meet the latest Euro 6 standard will be eligible for the scheme. 

Exact details of a launch date for the scheme, and of how much each small business will be able to claim, are yet to be released. However, Khan has confirmed that it will be live before the ULEZ comes into effect on 8 April 2019 and that he will work with the Department for Transport (DfT) to determine how best to allocate the funding.

“To truly get a grip on our lethal air, we need to take bold action to rid our city of the most polluting vehicles,” Khan said.

“It’s not good enough to do nothing, and I’m determined to take real action – which is why I’ve already delivered the Toxicity Charge in central London for the oldest polluting vehicles, cleaned up our bus fleet, and brought forward the ULEZ. My scrappage scheme is my next step in tackling pollution.”

City Hall has confirmed that funding for the scrappage scheme will come either from the £245m National Clean Air Fund or from underspend on Highways England’s £75m air quality fund. A proportion of money raised through Vehicle Exercise Duty (VED) in London may also be ring-fenced for the scheme.

Positive reaction 

The launch of the scheme has been welcomed by motoring bodies the AA and the RAC, as well as the Federation of Small Businesses (FSB) and the Centre for London. 

“We are delighted that the Mayor is announcing a fund to support micro businesses looking to scrap their older diesel vehicles,” the FSB’s London policy chair Sue Terpilowski said. 

“FSB has long argued that tackling air quality is a critical issue for London and we have been vocal with the Mayor to approach this brave new ULEZ world with carrot-based incentives. This will aid struggling small firms that are faced with changing an expensive vehicle stock – many of which are facing damagingly high costs of doing business in the capital.”

“Some small businesses that cannot afford to switch their vans to cleaner Euro 6s have been taking the hit from higher road use charges and simply passing on the extra costs to their customers,” AA president Edmund King added. 

“This scrappage scheme gives them a route to cleaner vehicles, an escape from air quality charges, the chance to stay competitive in their trades and businesses, reduce customer costs and above all the means to cut street-level pollution.”

While the Centre for London similarly welcomed the scheme, the body is additionally calling on Khan to develop a more holistic low-carbon transport policy package for the capital. 

“To really tackle London’s toxic air and to manage competing demands on road space, we need to reduce the overall number of vehicles on our roads – not just switch to less polluting ones,” Centre for London director Ben Rogers said.  

“This will require a comprehensive package of policy reforms. This package should include reforming and extending road pricing, supporting micro-consolidation and last-mile delivery capacity, investing in public transport measures to promote walking and cycling.”

Pollution problems

The launch of the scrappage scheme comes at a time when vehicles are estimated to account for almost half of London’s nitrous oxide (NOx) emissions, which breached legal limits for the whole of 2018 less than one month into the year.

In a bid to tackle this issue, Khan brought the “toughest” emission standard of any world city into force in the capital. Since then, the London Mayor has joined the leaders of 16 other UK cities in making a collaborative call for Prime Minister Theresa May to take “tough and urgent action” to reduce the nation’s air pollution levels.

The move came shortly after the UK was referred to Europe’s highest court for failing to tackle illegal levels of air pollution. The nation now faces a multimillion-euro fine from the European Court of Justice (ECJ) after levels of nitrogen dioxide were found to have been illegally high since 2010 in the majority of urban areas.

The capital’s business community has also taken action in preparation for the ULEZ launch, with 17 major businesses and organisations having recently committed to replacing their van fleets with EVs by 2028.

Meanwhile, businesses on one of London’s Bond Street – one of the capital’s most polluted – have collaborated to slash the amount of CO2e and NOx emitted by freight vehicles travelling in the area by 76%.

Elsewhere, The City of London Corporation has launched the city’s first “environmentally-friendly” parking tariff, offering discounted parking rates for EV and hybrid drivers in a bid to incentivise sustainable travel. The company, which governs the Square Mile district, has also launched a low-emission street zone on Moor Lane, near Moorgate, to help prepare drivers for the ULEZ.

Sarah George

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