4 © Centre for Economics and Business Research 2. Background 2.1. Introduction The Mayor of London announced in November 2022 that TfL would expand the ULEZ scheme which had been introduced for the central area only (the same area covered by the congestion charge) and then extended in to cover the area within the North and South Circular roads in October 2021 to cover the whole of London (defined as the area covered by the GLA) from end August 2023. This report examines the economic impact of this proposed extension and some of the social impacts. It does not consider the health impacts, though it notes that the quantification of some of the alleged health benefits has been challenged1. There is a very detailed and independent study of the potential health impacts under way and it probably makes most sense to await its conclusions. The report’s methodology is to use already published reports on the actual observed results from the initial imposition of ULEZ in the central area and its expansion to the area within the North and South Circular Roads; adjust for the differences between these areas and the area covered by the new expansion; adjust for the different time periods covered; and after making these adjustments scale up for the projected impact from the latest expansion. 2.2. Timeline of schemes The recent and current schemes Low Emission Zone Transport for London (TfL) has operated a London-wide Low Emission Zone (LEZ) that applies to the most polluting heavy diesel vehicles since 2008. Since 1 March 2021 the LEZ standard was tightened to Euro VI for HGVs, buses, coaches and other specialist vehicles. Vehicles that do not meet this standard face a charge of £100 per day. The LEZ had become ULEZ. Vehicles that do not meet the previous (pre-2021) Euro IV standards are charged £300 per day. Lorries, specialist heavy vehicles or vans (over 3.5 tonnes) and buses, minibuses, and coaches (over 5 tonnes) do not need to pay the ULEZ charge. Large vans (up to 3.5 tonnes) and minibuses (up to 5 tonnes) that do not meet the LEZ Euro 3 for PM standard are charged £100 a day; these vehicles must also meet the ULEZ standards to travel within the ULEZ. From when it was first introduced in April 2019 until October 2021, the ULEZ had the same boundary as the Congestion Charge Zone (CCZ). In October 2021 it was extended to inner London to cover all areas within, but not including, the North Circular (A406) and South Circular (A205) roads. The ULEZ operates 24 hours a day, 7 days a week, every day of the year, except Christmas Day. All vehicles, unless exempt, need to meet the ULEZ standards or pay a £12.50 daily charge to drive inside the zone. To meet the ULEZ standards, 1 The most detailed independent study only covers the original Low Emissions Zone and provided ambiguous results. A very detailed cohort study is currently underway which should help provide better answers. See: https://www.medrxiv.org/content/10.1101/2021.02.04.21251049v1.full.pdf
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