Business leaders and charities back Mayor’s diesel scrappage fund

01 March 2017

Letter backs Sadiq Khan’s ‘cost-effective’ proposal

A broad alliance of business organisations and environmental charities has written to the Chancellor of the Exchequer, Philip Hammond, urging him to introduce the Mayor of London’s proposals for a national diesel scrappage fund.

Last month, Sadiq Khan called on ministers to implement his new plans for a national ‘dirty’ diesel scrappage fund that would financially compensate motorists and enable the government to get a grip on killer toxic air.

Diesel cars and vans – many of which were purchased in good faith by drivers who wrongly thought diesel was a ‘cleaner’ option – contribute massively to London’s current toxic air pollution. 

Currently more than 9,000 Londoners die prematurely each year as a result of long-term exposure to air pollution. Air pollution in the UK is leading to 40,000 premature deaths annually, creating an economic burden of £20 billion every year.

Today, organisations including the Federation of Small Business, London First, Greenpeace and the Licensed Taxi Drivers' Association have expressed their support for the Mayor’s proposals for a national diesel scrappage fund.

In their letter to the Chancellor they say: “We believe the Mayor has adopted a cost-effective approach that minimises risks and simplifies administration for government.

“The Mayor’s proposal seeks to rebalance the financial cost of improving our air away from the individual – unlocking significant emission reductions while reducing the cost for those least able to afford to upgrade their vehicle or change how they drive. This will enable the government to have greater confidence that it will fulfil its legal obligation to comply with European legal pollution limits as soon as practically possible.”

Last month, Sadiq Khan delivered a report jointly developed by Transport for London and Cambridge Economic Policy Associates that provides a new framework for a national scrappage fund and modelling which other UK cities could use to produce their own scheme and subsequent share of funding required.

Key recommendations included:

  • payments of £3,500 to scrap up to 70,000 polluting vans and minibuses in London  and a national fund to support charities and small businesses that often own older diesel and mini buses (approximately £245 million in London)
  • a credit scheme valued at £2,000 to help low-income households in cities (those with incomes lower than £231.60 per week after housing costs) scrap up to 130,000 polluting cars, with incentives for car clubs and public transport (costing approximately £260 million in London);
  • payments of £1,000 to help scrap up to 10,000 older polluting London taxis (this is in addition to extra TfL help for drivers to upgrade to greener taxis): traditionally the taxi trade has had a limited choice of heavy, polluting diesel vehicles but this proposed fund would be used alongside wider existing support to help drivers switch to new zero-emission models (approximately £10 million in London).

The Mayor of London, Sadiq Khan, said: “Our filthy air is a national health emergency and it is vital that the Government treat this crisis as seriously as I am doing and introduce measures that will cut air pollution and save lives.

“I am pleased that a broad alliance of business organisations and environmental charities are backing my plans for a national diesel scrappage. Now is the time for the Government to take urgent and decisive action to help get the most polluting vehicles off our roads in a fair and reasonable manner.”

Sue Terpilowski OBE, London Policy Chair Federation of Small Businesses, said: "FSB London is pleased to be supporting the Mayor’s proposals for a diesel scrappage fund and that the concerns of our members have been heard. FSB supports the principle of improving air quality and removing from the roads those vehicles that contribute disproportionately to air pollution.”

Paul Morozzo, from Greenpeace, said: “Diesel fumes are toxic to human health. We know that now. And we know there’s a lot more pollution coming from diesel exhausts than legal limits allow. The government has to act swiftly. A scrappage fund is one of the niftiest ways to get dirty diesels off our roads. And for maximum take up it should offer credits for car sharing or public transport, as a lower-cost alternative to buying a brand-new cleaner car under the scheme.

Steve McNamara, General Secretary of the Licensed Taxi Drivers Association, said: “London’s black cab trade is committed to working with City Hall to address the capital’s declining air quality. That’s why from 2018 all new taxis in London must be zero emissions capable (ZEC). We fully support the Mayor’s proposals for a national vehicle scrappage fund, which will make it fairer and easier for drivers to meet the cost associated with decommissioning the oldest, most polluting vehicles, helping us to become the greenest cab fleet of any city in the world.”

Gerry Keaney, Chief Executive of the British Vehicle Rental Leasing Association, said: “We believe the Mayor’s proposal for a National Vehicle Scrappage Fund could make a significant contribution in reducing emissions by removing some of the oldest, most polluting vans and cars from our streets. The van leasing, vehicle rental and car club industry can meet these requirements and we would be happy to work with local and national government in introducing an effective and affordable scrappage fund for London and other cities.”

The Mayor has made tackling London’s filthy air a top priority and has doubled funding spent on tackling air quality to £875 million over the next five years. 

His T-Charge, the toughest emission standard of any world city, will start in central London on October 23 this year. Up to 10,000 of the oldest, most polluting vehicles are expected every weekday to be potentially liable for the new emissions levy of £10, which will apply to motorists who own vehicles that do not meet Euro 4 standards – typically those diesel and petrol vehicles registered before 2006 .

He is also consulting on introduction the world’s first Ultra-Low Emission Zone (ULEZ) in 2019, and then expanding it up to the North and South Circular Roads.

Notes to editors

The following organisations have signed the letter to the Chancellor: the Licensed Taxi Drivers' Association, Federation of Small Business London, London Sustainability Exchange, Greenpeace, Doctors against Diesel, the British Vehicle Rental and Leasing Association, and the New West End Company.

The Mayor wants to work with the government to help tackle dangerous air pollution once and for all. In addition to setting up a national diesel scrappage fund, Government actions should include:

  • Producing a 21st century Clean Air Act: New legislation would provide the overarching framework for action, dragging the law up to date to cope with the massive air quality challenges we face today. This would provide a legally enforceable right to clean air – standards currently enforced by the European Union and the Government should introduce new powers to better regulate all sources of emissions, not just road transport, and give powers to local authorities.
  • Vehicle Excise Duty (VED) and other fiscal reforms: It is essential that national policy is pulling people in the right direction. Unfortunately VED continues to make the purchase of diesel cars more attractive.
  • Devolving additional powers: London needs additional powers to manage toxic emissions such as pollution from construction sites and river traffic. For example additional powers to implement construction and river low emission zones similar to those used for road vehicles.
  • Greater funding for City Hall and boroughs: Government should recognise that London’s air quality challenges are linked to a national problem and provide additional support. This should include a share of Londoners’ VED revenues to fund improvements of nationally strategic roads within the capital to free up TfL resources to spend on further air quality measures. Additional funding for local authorities should also be made available. The current £3 million which comes from Defra’s air quality grants programme is supposed to support measures across the UK and is woefully insufficient given the scale of the challenge.

 

LETTER

Dear Chancellor,

National Vehicle Scrappage Fund

We are writing to express our support for the Mayor of London’s proposal for a national vehicle scrappage fund.

Air pollution in the UK is leading to 40,000 premature deaths each year. Many people who suffer from respiratory and cardiovascular conditions regularly have to cope with an exacerbation of their symptoms. As a result, the UK faces an economic burden of more than £20 billion every year.

Government policy led people to buy diesel vehicles in good faith only now to be told that they will have to pay extra to use it and that its value might be adversely impacted. Without your support, the mandatory introduction of Clean Air Zones over the next few years will deliver an economic burden on individuals and businesses in cities across the UK.

The Mayor’s proposal seeks to rebalance this cost away from the individual – unlocking significant emission reductions while reducing the cost for those least able to afford to upgrade their vehicle or change how they drive. This will enable the government to have greater confidence that it will fulfil its legal obligation to comply with European legal pollution limits as soon as practically possible.

We believe the Mayor has adopted a cost-effective approach that minimises risks and simplifies administration for government. His proposal targets national funding to UK cities with the highest levels of air pollution, and will support the government’s air quality plan by removing the most polluting vehicles.

A scrappage fund will have the greatest impact if we also no longer incentivise people to buy new diesel vehicles. We believe the spring budget is an excellent opportunity to reform vehicle excise duty and to discourage the purchase of high polluting vehicles.

Yours faithfully,