London introduces scrappage scheme

The City of London has launched a £110 million scrappage scheme for combustion engine vehicles. This follows the announced extension of the Ultra Low Emission Zone (ULEZ) to the whole of London from 29 August 2023. The scrappage subsidies target economically vulnerable groups.

++ This article has been updated. Kindly continue reading below. ++

London’s new vehicle scrappage scheme is aimed at low-income Londoners, people with disabilities, charities, and sole traders and businesses with ten or fewer employees. Within these groups, the maximum amount then varies again. For low-income Londoners receiving certain social security or disability benefits, grants of up to £2,000 (around 2,278 euros) are available to scrap their non-ULEZ cars or motorbikes.

Alternatively, free annual bus and tram tickets are offered in combination with a lower grant, while Londoners are to benefit from discounts on subscriptions, rentals and purchases of bicycles, e-bikes, cargo bikes, as well as electric cars and vans. This comes within the framework of a range of so-called ULEZ support offers.

People with disabilities who wish to scrap or retrofit a non-compliant wheelchair-accessible vehicle will be supported with £5,000 (around 5,695 euros). Dr Kush Kanodia – Disability Rights Champion explained: “Disabled people have already been the most disproportionately impacted from austerity, the pandemic and the current cost-of-living crisis.”

Charities, sole traders and businesses with ten or fewer employees registered in London will receive £5,000 and £7,000 (approximately 5,695 euros and 7,972 euros, respectively) for scrapping a van or minibus and £5,000 (approximately 5,695 euros) for retrofitting vans or minibuses. If the scrapped van or minibus is replaced by a purely electric vehicle, these companies will receive 7,500 or 9,500 pounds (about 7,972 or 10,820 euros).

While inner city areas often have many clean transport options, outlying, low-density areas face larger challenges. Low-density areas throughout the UK and Europe, also more often suffer from economic disadvantages, while at the same time presenting worse business cases for private enterprise on account of the lower population density.

London Mayor Sadiq Khan pointed out: “We have made huge progress in central and inner London, but there is much more to do in outer London.” He revealed that “The rising cost of living has been a key consideration for me, which is why we are launching this new and improved scrappage scheme – the biggest ever – to help low-income and disabled Londoners, businesses, sole traders and charities switch to cleaner vehicles, or support them to make the most of other transport options.”

The Ultra Low Emissions Zone was originally introduced in 2018 and expanded from its small starting area back in June of that year. Drivers of vehicles that do not meet the emissions standards of this zone will have to pay to enter. With the onset of the Covid 19 pandemic, London did lift some regulations again to allow supporters of “critical occupations” to move freely around the city for work, but these were reintroduced in May 2020. Further extensions of the zone took place in 2021 and March 2022, so the next step is to extend the ULEZ to cover the whole of London.

When unveiling these plans at the end of November 2022, Khan said that all the money raised through the ULEZ charging system would go back into funding public transport. The mayor also announced at the time that the “biggest ever expansion of the bus network in outer London” would take place at the same time. Around five million inhabitants are to benefit from the expansion of the ULEZ.

The new scrappage scheme includes grace periods that are meant to help drivers of the remaining non-compliant vehicles to prepare. The budget of 110 million pounds (equivalent to about 125 million euros) for the scrappage scheme is being provided by the city itself. The national government has made funds available for the scrappage scheme in other cities in the United Kingdom, including Birmingham, Bristol and Portsmouth, but did not provide the Kingdom’s capital with a similar scheme.

Update 01 June 2023

The Mayor of London, Sadiq Khan, has announced the expansion of the £110m ULEZ scrapping scheme meaning that tens of thousands more Londoners, including those receiving child benefits, as well as all small businesses in the capital with up to 50 employees, will be eligible for financial support to replace combustion vehicles from the end of July.

This is part of a major extension of London’s scrappage scheme ahead of the Ultra Low Emission Zone (ULEZ) expanding on 29th August 2023. Previously, only businesses with up to 10 staff members could apply. For families, the scheme expanded to apply to families earning under £50,000, up from £40,000.

“The majority of vehicles in London are already ULEZ compliant and will not have to pay anything. But I completely understand the concerns of people who may not have a compliant vehicle and are worried about how they’ll make the transition,” said Sadiq Khan. “We already have the biggest-ever scrappage scheme in place to support Londoners on low incomes, London based micro-businesses and charities and disabled Londoners. But I’ve listened to families and small businesses in outer London who want more support and I’m pleased to be able to announce today a major expansion to the scheme run by TfL to ensure we can help them.”

london.gov.uk, london.gov.uk (update)