Scrap scheme SHOCK
April 22nd, 2009 by Richard Aucock
INCENTIVES to boost car sales by scrapping old cars could be compromised, by Government only offering half the cash.
In return for a £1000 incentive from the Government, car makers are tipped to be asked to match the sum – watering down the help it offers struggling brands.
The Government is also tipped to scrap the green element, meaning ANY car will be eligible for the discount, not just those emitting low CO2 emissions.
This will hit manufacturer and car dealer profits on the small budget cars expected to benefit most from the scheme – and means the scheme won’t be as generous as that which has proven so successful in Germany.
Supporting UK manufacturers, such as Land Rover and Jaguar (with plants in key Midlands Labour MP seats) is suggested to be behind this.
A clash between the Treasury and the BERR is also hinted at by some insiders: BERR chief Lord Mandelson has been the chief supporter of the full £2k scheme.
It is reported today by various sources, including the FT and The Sun, that Chancellor Darling and Business Secretary Mandelson were still discussing the technicalities of the scheme late into the night.
This means it’s likely that a decision is still on a knife edge.
But the car industry will be hoping the Government puts its full weight behind the scheme, to give it the biggest stimulus possible.
It does, however, add an element of further intrigue to today’s Budget… watch this space!
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Tags: Budget, Chancellor, ft, green, scrappage, Scrappage, The Sun