ULEZ sign

The Mayor of London has announced the “biggest ever” scrappage scheme, which aims to support Londoners on lower incomes, disabled residents, charities, sole traders and small businesses in replacing or retrofitting their old, polluting vehicles.

The £110m funding for the scheme from City Hall is almost double the funding available for previous schemes, according to the Greater London Authority.

Grants of up to £9,500 will be available to support Londoners transition to cleaner transport options.

The formation of the new scrappage scheme follows the announcement that London’s ultra low emission zone (ULEZ) will be expanded to the Greater London boundary in August this year.

Drivers of older petrol vehicles (pre-2005) and most diesels over seven years old will have to pay £12.50 a day to drive in the zone which was originally launched in 2019 and expanded to cover the inner boroughs in October 2021. About 15% of vehicles in outer London are currently anticipated to be liable for the charge.

The Mayor said the new scrappage scheme and grace periods would help drivers of non-compliant vehicles to prepare.

About 94% of vehicles driving in the original ULEZ are now compliant, so do not pay a charge to enter it, compared with just 35% in 2017, when the scheme was announced.

To accompany the scrappage scheme, the Mayor and Transport for London have announced other ULEZ support offers from businesses. This will enable Londoners to benefit from discounts on subscriptions, rentals and purchases of bicycles, e-bikes, cargo bikes, cars and vans from companies including Brompton, Enterprise and Santander Cycles.

Londoners receiving certain means-tested benefits and non-means-tested disability benefits can apply for cash grants of up to £2,000 to scrap their non-compliant cars or motorcycles. Applicants can choose to receive a higher value package comprised of up to two free annual bus and tram passes and a lower cash grant.

Disabled people who want to scrap or retrofit a wheelchair accessible vehicle to make it compliant will be able to apply for grants of £5,000 to reflect the higher cost of these vehicles. Disabled people can also apply for a nominated driver who lives at a different address if they do not drive themselves.

Charities, sole traders and business with 10 or fewer employees registered in London can apply to scrap a van (£5,000 grant) or a minibus (£7,000 grant), retrofit certain vans or minibuses to make them compliant (£5,000 grant) or scrap and replace a van or minibus with a fully electric vehicle (£7,500 or £9,500 grant respectively).

The Mayor of London Sadiq Khan said: “I took the difficult decision to expand the ULEZ because it will save lives, help tackle the climate crisis and reduce congestion. We have made huge progress in central and inner London but there is much more to do in outer London.

“Clean air is a fundamental human right – and everyone deserves to breathe clean air including those in outer London. Around 4,000 Londoners are dying prematurely each year due to toxic air, with the greatest number of deaths attributable to air pollution in London’s outer boroughs. It is causing people to develop life-changing illnesses, such as cancer, lung disease, dementia and asthma, and leading to children growing up with stunted lungs.

“We need to get the most highly polluting vehicles off our roads, which are damaging the health of all Londoners, including drivers. 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 National Franchised Dealers Association (NFDA), which represents car and commercial retailers, welcomed the announcement, but its chief executive Sue Robinson said: “While the NFDA supports and is encouraged by the London Mayor’s decision to provide a financial incentive towards exchanging ageing and non-compliant vehicles for newer, greener modes of transport, we are severely concerned that this will not be enough and the scheme will continue to have negative implications for a large proportion of motorists. The total budget allocated for the scrappage scheme will not be sufficient to make an impact at the level at which the Mayor is expecting.

“By increasing the ultra low emissions zone to the entirety of London, it is forcing the residents of London to make a decision before they are ready. During a period of unprecedented financial struggle and in the middle of a cost of living crisis, families of low income may not be ready to make a transition to a newer vehicle even with the scrappage scheme.

“NFDA remains firmly against the decision to extend the ULEZ, or at least the timescale of enforcement is far too soon. Without the availability of government incentives and the commitment for more investment towards EV infrastructure to adequately prepare London for a complete transfer to EV adoption, this restriction should not be implemented.”