Businesses hit by London emissions initiative

15th April 2019.

Businesses have expressed concern over the London emissions initiative. New measures to raise fees for vehicles entering London have been met with criticism and concern from small businesses, with the Federation of Small Businesses (FSB) saying the move could potentially “spell disaster” for SMEs operating in the capital.

Under London’s new ultra-low emission zone (ULEZ) designation, older models of cars and vans that do not meet new, tighter emissions standards will now be charged £12.50 a day to enter central London, with the fee for heavier vehicles including lorries and coaches going up to £100.

Scheme ‘will undoubtedly impact SMEs more’

Whilst welcomed by environmentalists, the new scheme has been faulted by many in business who say that the initiative will disproportionately impact SMEs. Stating that the FSB is “highly supportive of measures to improve the capital’s air quality,” London policy chair Sue Terpilowski nevertheless warns that “the scheme will undoubtedly impact smaller businesses more than their larger counterparts,” adding “The cost of doing business in the capital is already high which is forcing many small businesses to re-evaluate their business activity.”

Eddie Curzon, London director of the Confederation of British Industry, also expressed concern that the new measures would be difficult for smaller firms, who may “struggle to afford the switch to low-emission vehicles,” adding that “for some larger vehicles, there are simply no low-emission alternatives available.”

Fees add to ‘lethal cocktail’ of poor conditions

The new charges, which will amount to an average annual bill of £5,760 for weekday driving of a single vehicle in congestion and ULEZ fees, are certainly something to consider for all businesses – but are likely to be of particularly concern for SMEs, which are often less able to absorb additional costs than larger operations. Many smaller firms have been particularly hard hit in recent times by challenging conditions, characterised by the FSB as a “lethal cocktail of increasing business rates, higher employment charges.”

Research shows that 63% of SMEs are concerned about the impact that the new ULEZ fees will have on their trading, with 43% expecting that the change will lower their profit margins, and one in four (26%) saying that they would now be unable to service or deliver to customers in certain areas as a result.