In just seven weeks, a new daily charge is to be introduced for entering the City of London, it will affect all pre-Euro 4 petrol vehicles and pre-Euro 6 diesels, with no resident discount nor blue badge exemption, it’s thought that up to 2.5 million vehicles could be affected.
Unlike the congestion charge, this new tax will be levied 24-hours a day, 365 days a year, but to offset the tax, there will be a London-only vehicle scrappage scheme implemented for families on ‘low incomes’. According to Sadiq Khan, Mayor of London, the air quality in London is “a national disgrace”.
Around 28% of people living in London are in poverty, and with London’s public transport costs being some of the most expensive in the world, many rely on their car for commuting, shopping and emergencies, more so than in other parts of the country.
But with the roll-out of the new Ultra Low Emission Zone, it’s thought that around 25,000 people per day could be expected to pay a further £4,550 per year to enter the city, and in October 2021, the scheme will spread to cover everything in-between the North and South Circular Road.
To avoid pushing families in to further poverty, a new car scrappage scheme will be introduced for those on low incomes, although no details have yet been published, aside from the headline grabbing ‘£25 million scheme’.
£10 per vehicle
The headline figure doesn’t seem that impressive when you realise that it equates to just £10 per vehicle in real terms, but the devil is in the (unpublished) detail.
As a bare minimum, a vehicle will need to be manufactured from around 2006 onwards for unleaded (forget diesel – 2015/16 or newer), and when demand squeezes the supply network, prices will inevitably rise.
It’s unlikely that the scrappage scheme will be paying cold hard cash to allow for a private purchase, which pushes the consumer to buy through a business, with an already fair mark-up on the vehicle but there will be an increase in paperwork for the dealer, which of course increases their overhead – so prices will rise further, or the quality of the product will reduce, meaning that a buyer will be getting a lesser deal either way.
Even working to a payment of just £500 per vehicle, that would only allow 50,000 vehicles to be swapped, to put that into perspective, that’s just 2% of the affected vehicles. The next question would be what kind of vehicle can you buy from a car dealer for £500?
25,000 per day
It’s thought that 25,000 vehicles each day would be liable for the extra tax, which over a five day week would equate to £1,562,500, or just over £80 million per year, that’s before congestion charging is taken into account.
Official sources will tell you that the congestion charge is a success; private car usage has fallen by around 39% since the introduction of it, but that doesn’t tell the complete picture – private hire vehicles, taxis and Uber use has increased by around 29%, it’s the increase in these vehicles that has led to journey times on public transport being extended, which of course has led to a decline in the number of people using public transport as it’s seen as too unreliable. Despite the volume of traffic being less, the average journey time has still increased, the speed of traffic has reduced further.
In 2017, TfL registered the first drop in revenue for the congestion charging zone, they also lost the £700 million / year operational grant from the government, and Sadiq Khan promised to freeze public transport fares, at a cost of £640 million, despite passenger numbers and fare revenue being down by £240 million.
Could there be an extra motive behind the Ultra Low Emission Zone charging? And the extension of that?
Nobody is denying that air quality is an issue, and measures should be put in to place to tackle it, but hitting the poorest families that are reliant on their vehicle to just survive shouldn’t be part of the equation.
With plans in place to charge employees parking at work, congestion charging, and ULEZ charges, owning a car has never been more expensive, and despite the Mayor of London trying to sugar coat it, the pill is very bitter to swallow.
Town centres are dying, a further 16 city representatives were at the Clean Air Summit where Khan announced his plans, they were all in agreement that the motorist should bear the brunt of the cost to clean up the pollution, but what happens when dirty vehicles are replaced with clean? Who will pay then?
What do you think of the vehicle scrappage scheme? Is it a genuine effort to help the poorest, or merely sugar-coating the pill? Let us know in the comments.