The VED is based on CO2 output. Basically, you pay more the larger the engine. With diesels getting the best of the deal.
The ULEZ introduced a couple of years ago is based on harmful emissions - like CO and NOX etc. Which IIRC are measured as a percentage of all exhaust gasses - so not penalising larger engines like the VED.
Interesting point. There was consultation before the proposed extension of the ULEZ to all of London next year. 60% were against it but ignored. Of course. Since it is all about raising more money through charges and fines. The existing ULEZ has raised about 100m so far - the extended one will raise a great deal more, since PT isn't the same alterative outside the central part for many.