Mandelson extends scrappage scheme
CAR industry bodies have welcomed the government’s decision to extend the cash-for-bangers scheme, saying it will help the ailing automotive sector achieve a lasting recovery.
Business secretary Lord Mandelson announced at the Labour party conference yesterday a £100m extension to the scheme, which equates to 100,000 vehicles. He also widened the cut-off period to trade in old cars by six months.
“The extension will inspire consumer and business confidence,” Society of Motor Manufacturers and Traders’ (SMMT) chief executive Paul Everitt said.
“It will help to stimulate demand, giving more consumers access to it, and create a bridge to a period when economic growth is strengthened and more sustainable,” he added.
The SMMT has been calling for an extension to the scheme since it was first announced in the Budget in April.
Mandelson also improved the scheme for van owners, who can now trade in their old vehicle if it is over eight years old, instead of the previous 10.
“As Britain’s automotive and wider manufacturing sector continue to play a large role in helping the UK economy emerge from recession this positive announcement comes at a very critical time,” David Raistrick, UK manufacturing leader at Deloitte said.
The scheme, which has been letting drivers trade in their old cars for £2,000 towards buying brand new ones since May, was “running out,” Mandelson said yesterday.
“We cannot do everything but that does not mean doing nothing,” he added, as he set out the terms of the extension.
Some 227,750 orders for new cars have so far been made through the incentive. It costs the government £1,000 for each car, meaning that £227m has been spent on the scheme.
Including the extension, £400m will have been spent on the scrappage scheme, which is due to end in February.