Mayor calls on Government to adopt diesel scrappage fund

13 February 2017
  • Sadiq urges ministers to introduce his proposals for a diesel scrappage fund
  • Proposals include £3,500 for up to 70,000 polluting London van and minibus drivers to buy cleaner vehicles
  • £2,000 credit scheme to help low-income London families scrap up to 130,000 cars
  • £1,000 to help scrap London’s oldest taxis - with additional support by the Mayor

The Mayor of London, Sadiq Khan, has called on government to implement his new proposals for a national ‘dirty’ diesel scrappage fund that financially compensates motorists and enables government to get a grip on killer toxic air.

The Mayor has made tackling London’s filthy air a top priority and has consulted on hard-hitting plans including a ‘toxic’ charge for the most polluting vehicles, bringing forward the introduction of the Ultra-Low Emission Zone (ULEZ), and then expanding it up to the North and South Circular Road.

However, the Mayor’s powers are limited. 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. Without a clear plan to tackle emissions from diesel vehicles, the city’s air will not improve.

In his manifesto, the Mayor committed to put forward a proposal to government for a national vehicle scrappage scheme and today he has delivered a report jointly developed by Transport for London and Cambridge Economic Policy Associates.

The Mayor’s report 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.

The package of proposed measures could be delivered by government over a two-year period, and would help fulfil the UK’s legal obligation to comply with European pollution limits, incentivise ‘dirty’ diesel drivers to switch to cleaner vehicles, and protect the health of people in the capital and across the country.

The key recommendations have now been presented to the Chancellor, Phillip Hammond MP, Secretary of State for Transport, Chris Grayling MP, Secretary of State for Environment, Food and Rural Affairs Andrea Leadsom MP, and the Minister for London, Gavin Barwell MP. They include:

  • 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 (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).

Urgent implementation of these proposals would help reduce the cost of introducing and expanding the Ultra Low Emission Zone and help to achieve a 40 per cent reduction in London road transport NOx emissions.

Much of the air quality challenge in the UK results from government historically promoting diesel vehicles, which clearly demonstrates that national government incentives can be very effective, with new diesel cars still dominating the UK car market.

Under his bold new proposal, the total government compensation for drivers of the most polluting diesel vehicles in London would be up to £515 million. This is before taking into account industry participation, which has the scope to make a significant reduction in the amount to be funded by Government.

The Mayor of London, Sadiq Khan said: “The toxic state of our air leaves us with no choice but to rid our city of the most polluting diesel vehicles. It is shocking that nearly half of new car sales in the UK are still diesel vehicles and the national system of vehicle excise duty still incentivises motorists to buy these polluting cars.

“I’m urging government to immediately review this policy and today I’ve delivered a detailed report on how government can deliver an effective national diesel scrappage fund. One that both fairly compensates motorists and rapidly helps clean up our filthy air.

“A national diesel scrappage fund is the cost effective way to deliver significant emission reductions while reducing the economic impact on those most affected, such as small businesses, charities and low income households.

“For years government has incentivised and encouraged people to purchase diesel cars it is only fair that they now helps people to switch to cleaner alternatives.

“The government needs to help us clean up the dangerous air in London."

Notes to editors

The Mayor wants to work with the government to help tackle dangerous air pollution once and for all. 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: Before Clean Air Zone (CAZ) measures to tackle diesel emissions are introduced it is essential that national policy is pulling in the same 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 (such as 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.
  • Heathrow expansion: Government must now accept that a third runway at Heathrow is not compatible with the objective of achieving – and sustaining – legal compliance and reducing exposure to toxic air.

To view the proposal, visit:

Supportive quotes

Alistair Kirkbride, Executive Director, Carplus Bikeplus, said: “Swapping dirty diesels for mobility accounts is not just better for air quality, it will help people save money as well. A £2,000 credit will go a long way in a car club car, on bike share or public transport, enabling people to choose the best way to travel without wasting money on an older vehicle that can drain the wallet.”

Carplus Bikeplus is an independent environmental transport charity working for accessible shared mobility, including car clubs, bike sharing and 2+ car sharing.

Gerry Keaney, Chief Executive, British Vehicle Rental Leasing Association, said: “There is an urgent need to address pollution in our cities, which requires a change in the way we travel and the vehicles we use. 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.

"Given the challenges that our cities face, any such scheme must go further than simply encouraging replacement cleaner vehicles. It must also encourage a more efficient use of them and greater uptake of sustainable modes such as walking, cycling and public transport.

"There are some urban journeys or tasks that require a car or van, but those vehicles should be clean, safe and modern and should be used efficiently. 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 scheme for London and other cities.”

Established in 1967, the British Vehicle Rental & Leasing Association is the UK trade body for companies engaged in the rental and leasing of cars and commercial vehicles. Its 900+ members operate a combined fleet of around 4.8million cars, vans and trucks. BVRLA members buy nearly half of all new vehicles sold in the UK, supporting around 317,000 jobs and contributing nearly £25bn to the economy each year.

Harry Quilter-Pinner, Research Fellow at the Institute for Public Policy Research, said: “Our research shows that both legal and World Health Organisation limits on air pollution continue to be broken and the biggest cause of this is diesel vehicles. Without rapid policy change air quality will remain above legal limits until 2025 and beyond.

“To help people make the transition to cleaner vehicles, national government should provide the money for a vehicle scrappage scheme. This funding should be devolved to those cities with the worst pollution and be linked to the rollout of a network of clean air zones. So we support Sadiq Khan’s call for a National Vehicle Scrappage Fund, particularly the idea of funding communities to explore new and sustainable ways of travelling.‎"‎

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