Feud over scrap scheme ends after UK carmakers commit
CARMAKERS ended their dispute with the government over the new cash-for-bangers scheme yesterday, and confirmed they will take part in the programme.
Ford and Honda delayed their involvement in the scheme at the eleventh hour over concerns about how their financial contribution to the scheme would be structured.
Both wanted clarification of VAT arrangements and tax liabilities. They also wanted car dealers to contribute to a share of the VAT on the cars.
But the carmakers have now confirmed that they support and will be involved in the scheme, following last minute negotiations with the government.
The delay was a huge embarrassment for Lord Mandelson, who is spearheading the project.
Under the terms of the agreement, motorists can trade in their old banger in exchange for £2,000 towards a brand new car. Half of the cash refund will be paid by the government, with the remaining half being footed by the carmaker.
Ford said that since the scheme was announced, it has taken more than 3,000 extra orders for brand new cars.