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£23m van scrappage scheme to help SMEs prepare for London ULEZ

SMEs are to get access to funding from a £23m scrappage scheme to help them prepare for next year’s launch of the London Ultra Low Emission Zone (ULEZ).

The London ULEZ takes effect on 8 April and will apply 24 hours a day, 365 days a year

The scrappage scheme is planned for implementation ahead of the April arrival of the ULEZ and will use City Hall funding to help smaller business owners – defined as those with fewer than 10 employees – scrap older, more polluting vans and switch to cleaner vehicles.

The launch of the scrappage scheme follows ongoing calls from across the industry for help for small fleets, after the Mayor brought the ULEZ start date forwards 17 months. Speaking at the time, Arval said that SMEs and specialist vehicle operators would bear the brunt of the early introduction; from 8 April, diesel vans which do not meet the latest Euro 6 standard will have to pay £12.50 a day to drive in central London; charges will apply 24/7.

Manheim data published less than a month ago shows that 80% of vans are still not compliant with the scheme; the figure was outlined as part of a ULEZ-focused event run by the British Vehicle Rental and Leasing Association (BVRLA) and Transport for London (TfL) for van users in the capital as the organisations highlighted the need for operators to start thinking ahead to ensure they’re running compliant vehicles.

Full details of the City Hall scrappage scheme are yet to be announced but the Mayor has said funding would be available to scrap vans that do not comply with the new ULEZ standards, but which are driven into the ULEZ zone regularly.

The Mayor has asked officials and TfL to work out how the money could be spent most effectively but has also called on the Government to match-fund the scheme with £23m of Government money, funded either from the £245m National Clean Air Fund or from underspend on Highways England’s £75m air quality fund, which would enable the scheme to expand further.

In a statement, the Greater London Authority said: “Londoners pay hundreds of millions of pounds in Vehicle Exercise Duty (VED) every year which support these funds but, shamefully, a negligible amount of this money is then spent in London.

“If the Government stepped up and matched the Mayor’s funding, it would enable City Hall to put in place further scrappage support for other Londoners, including those on low incomes, and charity vehicles. It would also give ministers the evidence they need to judge scrappage proposals from other cities, and demonstrate the transformational benefits of a truly national scrappage fund.”

The scrappage fund has earned widespread praise, including from the Federation of Small Businesses.

Sue Terpilowski OBE, London Policy Chair, 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 Ultra Low Emissions Zone (ULEZ) world with ‘carrot-based incentives’ to aid struggling small firms who are faced with changing an expensive vehicle stock – many of whom are facing damagingly high costs of doing business in the capital.”

The BVRLA also welcomed the news while highlighting the alternatives to buying new vans. Chief executive Gerry Keaney said: “Vehicle rental and car clubs will also play a vital role in helping businesses and individuals make the shift to cleaner, ULEZ-compliant motoring from April 2019.”

Denise Beedell, FTA’s Policy Manager – Vans and Urban added: “We are really pleased to see this support for the smallest businesses given that vans older than 2½ years will be charged under the Mayor’s ULEZ plan. A preferable approach, though, would be to allow a sunset period for those small businesses already operating vans within London to give them more time to adapt.”

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Written by Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.

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