“Actually, (Rod will correct me on this) you can't now fit a new Mode C, only a secondhand one.”
This was overturned to allow Mode C to be fitted (both new and old). The second hand units from C of A aircraft requiring IFR fit have boosted transponder numbers in the LAA fleet to current levels.
To give some more numbers, there is about 7000 C of A SEP aircraft in the UK. I do not know what % of these have transponders, but less than 1% will have any form of traffic detection.
Some people are suggesting we should use RIS. I have not managed to get a RIS at a weekend for years. There are almost no units open at weekends and if it is a good VFR day they cannot offer RIS (for VFR traffic) due to workload. If you want to base separation on current transponder tec then you would have to provide blanket LARS plus compulsory radio and transponder, or compulsory traffic avoidance on top of a transponder. I do not see either happening in the next 10 years and not at all with current tec..
Rod1