It is not the end for the car scrappage scheme
When the government brought in the car scrappage scheme earlier this year many industry groups and consumers were delighted. The scheme had already been used in a number of other European destinations, and had proven very successful.
Motoring industry groups had been calling on the UK government to follow the lead of these other countries by bringing in a scheme, as they said that it would help to boost the flagging motor industry and would result in consumers being able to drive safer, greener vehicles.
The government eventually buckled and agreed to bring in the scheme, and after some initial teething problems the scheme appeared to be a hit. Drivers that had a car that was at least ten years old, and which they had owned for at least twelve months, were able to get up to £2000 off the cost of a new car if they scrapped their old one. Many people rushed to take advantage of the scheme, and this was reflected in the boost in sales for the motor industry.
However, the bad news was that the government had only put aside £300 million for this scheme, and with so many drivers keen to take advantage of the cash for bangers programme it came as no surprise when funds started to run out quite quickly. It was recently reported that the scheme may only have another week or so to run because of lack of funds, which meant that those wishing to take advantage of it would have to act now or go without.
As a result of the situation some motor industry groups called on the government to extend the scheme, stating that otherwise the motoring industry would suffer again. The Society of Motor manufacturers and Traders claimed that the funds were drying up to the point where the scheme may have to end in a week or so unless it was extended, and the Engineering Employers Federation wrote to the chancellor of the exchequer, Alistair Darling, to ask for the scheme to be extended further.
The EEF told the chancellor that so far the scheme has helped to boost the motoring industry, and that it had also kept skilled workers in jobs as a result of this. However, officials from the EEF have said that without this incentive it was unsure as to whether any recovery of the motor industry can be sustained. The group called for an additional £300 million to be committed to the scheme.
Steve Radley, the Director of Policy stated: ‘The success of the scrappage scheme has been clear for all to see and has put a floor under manufacturing recession and helped retain skilled employees. However, it is no means certain that this positive trend will continue in the near future with consumer confidence still fragile and unemployment still rising. Failure to extend the scheme before a stronger recovery is in place runs the risk of pulling the rug from under the automotive sector, damaging key supply chains and prospects for a better balanced economy in the upturn.’
As a result of the calls for an extension the government has agreed to extend the scheme although not by as much as the motor industry had hoped. It was announced that the scheme would be extended by a further £100 million, which means that another 100 million vehicles will be able to go through the scheme. Changes are also going to be made with regards to the age of the vehicle, which could drop from ten years to eight years.
Tags: initial teething problems, car scrapping scheme, twelve months, scrap old cars, Engineering, rug, boost
Interesting article admin. I wonder if they drop the year limit to 8 if it will have a negative effect on people. It seems that people are making up their own car-scrappage schemes as they go as recently seen on the Isle of Wight. A bus company has introduced its own car scrappage scheme – offering passengers free travel for a year in exchange for their old banger. It allows residents to swap an old car, scooter, moped or van for a ticket worth up to £720 to use on the company’s buses for 12 months.