U-Lez Miserable? London’s small businesses need support on new emissions rules

A week is a long time in politics, or so goes the famous adage by former Prime Minister Harold Wilson.

And it is apparent that a week and a half will be a very long time indeed in the world of small businesses, between 29 March and 8 April.

With our departure from the European Union scheduled for the end of March, and new employment changes and digital taxation measures taking effect from 6 April, the final book-end to these changes will be 8 April, as London businesses prepare themselves for the launch of Sadiq Khan’s new ultra-low emission zone (Ulez).

In a bid to combat pollution in the capital, the scheme will apply to the current congestion charging zone. Vehicles must either meet tighter emissions standards, or pay a daily charge that operates 24/7.

Essentially, older vehicles will have to pay more to travel into and around central London.

While we are highly supportive of measures to improve the capital’s air quality, the scheme will undoubtedly impact smaller businesses more than their larger counterparts.

A recent Federation of Small Businesses (FSB) survey found that 63 per cent of our London members feel that the Ulez will raise operating costs. Just under half (43 per cent) said that it would lower their profit margins, and over a quarter (26 per cent) warned that they would be unable to service or deliver to customers in certain areas.

Worryingly, more than four out of 10 respondents were unfamiliar with the tighter emissions standards that they need to achieve to comply with the Ulez – and nearly a third of companies were unaware that the new scheme comes into force in April.

To his credit, the mayor is offering support. His launch of a diesel scrappage scheme for micro businesses last week was an extremely welcome initiative, and something that the FSB has long called for.

The scheme will support many businesses by offering financial incentives (either £3,500 or £6,000) for those taking a lease of a new electric or compliant car, or just simply looking to scrap old vehicles.

We will continue to work with the mayor, pushing for the government to provide matched funding to support the scheme, as small businesses want to invest in a low-emission capital city.

However, we must not forget that many businesses simply cannot afford to change a heavy vehicle at the drop of a hat, such as the small coach companies, delivery firms, or vehicle recovery businesses that we are hearing from on a daily basis.

These businesses are crying out for a modern, retrofit system that will enable them to keep their current stock, yet make them more environmentally friendly at the same time.

With just over a month to go, the messaging and communication needs to step up a gear. We urge the mayor not to be heavy-handed with the launch, and to work with small businesses that need the time to change their vehicles.

The FSB has three main calls for moving forwards.

First, we need a soft start to the scheme. If a business vehicle that does not meet the emissions standard enters the zone after 8 April, Transport for London (TfL) should write to them, stating that they have three months to change vehicles or they will receive the backdated charges.

Second, TfL and the mayor must use the final month before the launch to significantly increase spending on external communications, as many small businesses are still unaware of the changes.

A relentless focus by TfL on communication over the next few months is critical – we want to start seeing those Ulez messages at the pumps where businesses fill up their vehicles.

And finally, TfL should provide a grace period of 12 months to businesses which can prove that they have a lease that runs up to April 2020 – when the original Ulez date was set by the previous mayor.

Small business owners are used to being nimble, adapting to new circumstances and making the most of opportunities. They are creative and entrepreneurial. And yet, as we head through winter and into early spring, small business confidence in London is low and needs lifting.

What better way for the mayor to demonstrate his small business credentials than by showing that the book-end to the longest week and a half for small businesses will not be “U-Lez Miserable”.