The true cost of Sadiq Khan’s ULEZ expansion for struggling families

The true cost of upgrading a car to meet London‘s Ultra Low Emission Zone (Ulez) emerged today as the expanded scrappage scheme was branded ‘too little too late’.

To avoid the £12.50 daily fee for driving in the area – which will be extended to all of Greater London on August 29 – diesel cars must generally have been first registered after September 2015, while most petrol cars registered after 2005 are also exempt.

Today, Mayor Sadiq Khan said every Londoner with a polluting car facing the Ulez charge will now be able to get a grant of up to £2,000 to support an upgrade.

But opponents claim the support is a ‘waste of taxpayers’ money’ and point out that it will only benefit the few who still have a car worth less than £2,000 – because those with cars worth more than £2,000 would receive more money by selling it.

Transport for London (TfL) estimates more than 200,000 drivers of non-compliant vehicles will be affected by the expansion – which got the go-ahead at the High Court last Friday. But many of these cars will be worth far more than £2,000.

TfL has insisted that nine out of ten cars seen driving in outer London on an average day comply with the Ulez standards. But figures obtained by the RAC show more than 690,000 licensed cars in the whole of London are likely to be non-compliant.

This does not take into account other types of vehicles or those which enter London from neighbouring counties, which will still be exempt from the scrappage scheme.

And some drivers are being charged over £3,000 more for Ulez-compliant diesel cars compared with identical models only a year older which do not fit emissions criteria, according to online vehicle marketplace Auto Trader.

The company said the biggest price gap in the UK involves a used Volkswagen Golf 2016 model being sold for £3,601 more than a 2015 non-compliant version. That is an increase of 38 per cent, from £9,445 to £13,046.

Similarly, a used Ford Focus from 2016 costs £2,828 more than a 2015 model. This also represents a 38 per cent rise, from £7,508 to £10,336.

Other used 2016 models with a premium for Ulez compliance include a Land Rover Epoque (£2,594 more expensive), Nissan Qashqai (£2,220 more expensive) and BMW 3 Series (£1,645 more expensive).

Meanwhile the Ford Transit Custom Panel Van is £10,799 for the 2015 model or £13,394 for the 2016 version – a price difference of £2,595 or 24 per cent. 

Auto Trader commercial director Ian Plummer said: ‘This is hard evidence of the distortions in the market caused by the Ulez extension. While the overall used car market is in good health nationally, drivers are having to pay a price penalty to follow the rules in London.

‘This doesn’t need to be a case of pocket over planet, it is possible to achieve both – but it’s vital we get the balance right between the carrots and the sticks or we’ll lose people along the way.’

Auto Trader said a number of cheaper petrol options which comply with the rules are available in London, such as a 2008 Ford Ka costing £1,499 and a 2004 Ford Fiesta costing at £1,560.

Therefore the best case scenario for someone with a very old car worth a few hundred pounds is that they could earn £2,000 from the scrappage scene and then buy a used 2008 Ford Ka – effectively making them a total of £501.

The firm added that there were 35,573 Ulez compliant vans for sale on Auto Trader nationally in July. It also said that 8 per cent of Ulez compliant van stock is under £10,000 and 51 per cent of compliant van stock is £20,000 or under.

It comes as Mr Khan announced a major expansion of financial support designed to ease the impact of Ulez on hard-pressed families amid the cost-of-living crisis.

The announcement follows a request made by Sir Keir Starmer for Mr Khan to reflect on how the extension of Ulez to all London boroughs was being carried out.

The Labour leader blamed concerns around the scheme for his party’s narrow by-election defeat in Boris Johnson’s old Uxbridge and South Ruislip seat last month.

Mr Khan said while he will not ‘step back, delay or water down’ the policy to tackle air pollution, he is widening the scrappage scheme after listening to residents’ unease about Ulez.

While previously only child benefit recipients, low-income and disabled people were eligible for scrappage grants, from August 21 all Londoners with non-Ulez compliant cars or motorcycles can apply.

The Labour incumbent in City Hall also announced that small businesses and sole traders can get £21,000 to junk up to three vans, with £27,000 available for charities to replace three minibuses.

More support kicking in today includes higher payments for switching to an electric vehicle, for charities with old vans, and for retrofitting an existing vehicle. Grants for replacing wheelchair accessible vehicles will double to £10,000.

Ulez will be expanded beyond the capital’s North and South Circular roads in 25 days’ time.

Drivers of vehicles which do not meet minimum emissions standards are charged a £12.50 daily fee for entering the zone.

Mr Khan said: ‘I have always said that expanding the Ulez to the whole of London was a difficult decision, and not one I took lightly – but it’s a decision I remain committed to seeing through.

‘I’m not prepared to step back, delay or water down vital green policies like Ulez, which will not only save lives and protect children’s lungs by cleaning up our polluted air but help us to fight the climate crisis.

‘I have continued to listen to the concerns of Londoners over recent months, and today I can announce a huge expansion to the scrappage scheme that means that all Londoners with non Ulez-compliant cars will now be able to get financial support to switch to greener, less polluting vehicles.

‘As we continue to build a greener and healthier London for everyone, I’m determined that no Londoner and no London business is left behind. We need to take people with us on the path to a sustainable future. We are ensuring that help is now available for everyone – and I urge Londoners to come and get it.’

The Mayor, who last week won a High Court challenge against five councils who wanted the Ulez expansion to be ruled unlawful, will use £50million of City Hall’s reserves to fund the changes.

This will bring the total investment to £160million – the most generous scrappage scheme ever seen in the UK, his office said.

When asked about the scrapping scheme by by the PA news agency at a media event today, Mr Khan said: ‘I’m quite clear in relation to this policy, which is to clean up the city, but also tackle climate emergencies. 

‘I’ve been listening throughout my years as mayor – when I first announced the policy in November as a consequence of me listening, in January when I first announced financial support, the focus was targeting that support on lowest income families, micro businesses, in June when I expanded the support, that was because we still had lots of money left in the kitty, and I was keen to make sure every family in London receiving child benefit, more than 860,000 families, received support.

‘We now have the good news, still have £60 million left in the kitty, I’m topping that up with £50 million of more money, the most generous scrappage scheme in the country without a penny of support from the Government to make sure every Londoner who may have a non-compliant car or motorbike receives support.

‘But there’s some good news, as of last week, 97 per cent of cars in inner London are compliant, in outer London on an average day, nine out of ten cars seen driving are now compliant, it’s actually, the vast, vast, vast majority of Londoners have a compliant vehicle they won’t pay a penny more, they’ll see the benefits of clean air, for those that may have a non-compliant car what I’ve announced today is support for them.’

When asked if the Ulez expansion could impact the next general election, Mr Khan said when he re-stood to be mayor in 2021 he received ‘more votes than any sitting mayor’ and he added that when he stands again next year he wants to stand to ‘build on the record of tackling the twin emergencies of climate urgency and air pollution’.

He added: ‘These policies are policies that are popular when they’re properly explained.’

Mr Khan also suggested drivers start looking for alternative cars now when asked if there is enough time to buy a Ulez compliant car with the £2,000 scrappage grant before the expansion comes in on August 29.

He told PA today: ‘Well the good news is that people can now start looking for alternative cars if their car’s not compliant, but the even better news is more than likely not your car is going to comply, and what people don’t realise because of the misinformation is they’re probably driving, if they are driving, a compliant vehicle as it is.

‘Almost half of households in London don’t even own a car. Those that do, in inner London 97 per cent of cars that are seen driving are complying, in outer London, nine out of ten are compliant.

‘So first check on the TfL website if your vehicle’s compliant. If it’s not compliant, more likely than not it is compliant, check about the scrappage scheme, and check there on the websites, buy an alternative compliant vehicle.’

Christina Calderato, TfL’s director of strategy and policy, said: ‘The expansion of the scrappage scheme means that the remaining minority of Londoners who need to drive and don’t have a car that meets the standards now have access to financial support to make the green transition.’

But Susan Hall, the Conservative Party’s candidate for the London mayor election in May next year, said the changes are ‘too little, too late’.

‘Thousands of families, small businesses and charities face financial ruin because of Sadiq Khan’s Ulez expansion, which will do next to nothing to improve air quality.

‘If I am elected Mayor, I will reverse this disastrous policy and replace it with a £50 million fund to reduce air pollution without taxing people.’

She also told LBC radio: ‘The grants aren’t insufficient as prices for used cars and vans have gone up and the expansion in eligibility doesn’t come into effect until a week before the Ulez.

‘I mean it’s totally unacceptable and given that his own impact assessment says it will make virtually no difference at all, what a waste of taxpayers’ money, £160million.

‘Instead of taxing everybody in outer London he could have put that money towards where we’ve got pockets of pollution.’

Health minister Maria Caulfield told Sky News: ‘I don’t think it touched the sides of people’s concerns. I think he’s reacting to why Labour didn’t win the Uxbridge by-election. £2,000 is nothing if you’re having to replace your car.’

She also said people were worried about what will happen with Ulez ‘when (Labour) get into government’.

Ms Caulfield was picked up on the apparent mistake by Sky News presenter Anna Jones, who said: ‘You said when Labour get into government, I assume you mean if they get into government?’

‘Well absolutely, that’s the concern that people have,’ Ms Caulfield replied.

And Nathan Coe, chief executive of Auto Trader, told MailOnline: ‘This is great news for Londoners who have found it difficult to transition to less polluting vehicles. 

‘We previously called for an extension of the scrappage scheme’s terms and this announcement from Transport for London is a really encouraging move to show the positive impact that incentives and support can have on people who are keen to make sustainable decisions but who just can’t afford to.

‘Further support, in the shape of a scrappage scheme for all Londoners, shows that prioritising clean air doesn’t have to be a decision of pocket over planet. 

‘Some drivers may find that selling is still a better option rather than scrapping if their car is desirable in the broader national market. We encourage drivers to do their research before deciding what’s best for them, they can start by valuing their car with Auto Trader.

‘We also welcome the scheme’s extension designed to support small businesses to drive more sustainable vehicles. Vans commonly make more frequent and longer journeys and so trying to incentivise businesses to make the switch to electric will no doubt be a great step in the right direction to improve Greater London’s air quality.’