Why Scrapping Cars Could Salvage Our Motor Industry; Scheme Would Boost Production, Say Experts

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Byline: By Jenny Waddington

WITH the government being accused of not providing "real help" to the ailing automotive industry, one option being discussed to help alleviate the fall in new car sales is the Scrappage Incentive Scheme.

Many countries across Europe have adopted the programme - which not only helps with rising car sales, but also rids the roads of gas-guzzling motors.

Experts say the Scrappage Incentive Scheme for car buyers would help the struggling automotive industry and the UK economy.

But the government is dragging its heels on making a firm decision about the programme, despite it proving to be a huge success in other parts of Europe.

Earlier this month business secretary Peter Mandelson looked poised to introduce a British version of the scheme - which has been either adopted or planned by at least eight of the European Union's 27 countries. However, no firm decision has yet been made by the UK government, despite calls from leading experts across the country.

Experts believe the scheme would have many benefits, including increasing new car sales, securing more UK jobs in the automotive industry, delivering lower CO2 emissions and lower emissions of other greenhouse gases, reducing the number and severity of accidents and being very cost effective - as higher VAT revenues from increased sales would offset the cost of any incentive offered.

The proposed scheme would mean owners of cars and light commercial vehicles (LCVs) over nine years old could scrap them in return for a pounds 2,000 cash incentive towards a new or nearly new vehicle.

This could bring about a rise in new car sales, helping manufacturers who have been crippled as the credit crunch makes car loans dearer and scarcer, while economic uncertainty deters worried consumers from expensive "big-ticket" purchases.

Last month, sales of new cars were almost 22 per cent below a year earlier, according to the Society of Motor Manufacturers and Traders (SMMT), while UK manufacturers have shed thousands of jobs. …