London businesses wary as Vehicle Pollution Toll Zone expands

Days ahead of the controversial expansion of London's road charging scheme for the most polluting vehicles, businesses in the British capital remain wary despite the mayor unveiling further subsidies.

The extension of the Ultra-Low Emission Zone (ULEZ) to all of Greater London on Tuesday has sparked a wider public backlash as Britons grapple with a cost-of-living crisis fuelled by decades-high inflation and low economic growth.

Alongside that, a third of London businesses are concerned that the GBP12.50 ($16) daily toll set to be applied across the city will have a negative impact on their employees, according to the London Chamber of Commerce and Industry (LCCI).

Around 40 of those based in the suburbs -- where the scheme is being expanded to -- believe it will increase their costs, it found.

"We've been urging the mayor of London to do a lot more so that businesses, particularly small businesses, are not hammered," James Watkins, of the LCCI, told AFP.

He said bosses were "relieved" after under-fire Labour mayor Sadiq Khan announced increased financial support for owners of more polluting vehicles affected by his ULEZ extension.

"It's important because firms were worried for their workers," Watkins added.

Under the new support measures, owners of older petrol or diesel vans -- many thought to be self-employed and small-business operators -- can receive GBP7,000 in scrappage reimbursement, compared with the previous GBP5,000.

Meanwhile, every Londoner will now be eligible for grants of up to GBP2,000 to scrap their non-compliant vehicle.

Largesse comes at a cost: the mayor's budget for the bonus has jumped by GBP50 million, and now stands at GBP160 million.

Khan bowed to growing pressure to offer more financial support after his signature policy -- aimed at cleaning up London's "toxic" air -- was accused of hitting those already struggling with their bills the hardest.

Low emission zones across Europe, from Berlin and Brussels to Paris and Rome, have attracted similar criticism, in particular from right-wing and far-right groups.

In France, a number of political groupings, drivers' associations and professional organisations have voiced their opposition to the zones introduced in or proposed for several cities.

In neighbouring Italy, an increase in charges for vehicles wanting to access inner cities, such as the plan put forward by Milan's mayor, were widely savaged by opponents.

They accused the city's authorities of making it "more expensive".

Back in Britain, the ULEZ expansion has become increasingly politicised.

It was widely blamed for costing Khan's main opposition Labour party victory in a by-election last month in former prime minister Boris Johnson's old parliamentary seat, where it became the dominant campaign issue.

That surprise result is seen as having big potential implications for the fate of other environmental policies, as net-zero and clean air targets collide with the more short-term priorities of increasingly cash-strapped voters.

Facing sustained criticism over various aspects of the ULEZ expansion, Khan's office has insisted that drivers compensated for scrapping their vehicles will be able to choose from "thousands" of compliant replacements available for sale.

"The mayor has been on the side of London's businesses throughout this process," a spokesman for Khan said in a statement.

"When launching his GBP110 million scrappage fund -- the biggest of its kind -- to help Londoners make the switch to cleaner, less polluting vehicles, the mayor prioritised small businesses and sole traders, as well as charities and low income and disabled Londoners."

But the RAC motoring group said drivers in and around the capital "could easily end up having to pay (the) GBP12.50 daily ULEZ charges for quite some time".

The organisation noted that many interested in the scrappage scheme could only apply from August 21 -- just eight days before the expansion.

"Add to that the fact that applications can take up to 10 days to process and the time it takes to find the right car, and costs really start mounting up," it said.

The LCCI has demanded a "grace period" for Londoners caught in this situation, noting "supply chain difficulties" could contribute to further delays in getting new vehicles.

But, so far, their request has gone unfulfilled.