Government announces £100m extension of car scrappage scheme
Tue 29 September 2009
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The Government has announced that it is to extend the £300m car scrappage scheme with gives car buyers £2,000 off a new car when they trade in a vehicle over ten years old. Speaking at the Labour Conference Lord Mandelson the Business Secretary announced that an additional £100m would be made available to the scheme, which will still finish by the end of February 2010 at the latest. Meanwhile, France has annnounced plans to extend its national scrappage programme while Germany says that its scheme will end.
The Society of Motor Manufacturers and Traders (SMMT) recently called for the scrappage scheme to be extended to avoid a relapse in demand for cars while consumer confidence remains weak and the recovery fragile. The SMMT said that the original £300m set aside for the scheme was close to running out after more than 227,000 orders had been placed through it.
Elsewhere, it is reported that the French Government is considering extending their scrappage scheme until 2011 while Germany has announced that funding for their scheme has run out.
Commenting on the French scheme (reported by the BBC) the Economy minister Christine Lagarde said: ‘We are looking at two fiscal years for the moment, 2010, 2011 in addition to 2009. As successful as it has been...we need to be successful in pulling out...We are looking at two fiscal years to make it truly gradual.’
In Germany, the Government says that almost two million Germans have scrapped their old vehicle to buy a new one and that the scrappage scheme has proved an effective support and stabiliser for the German economy. A Government spokesman has, however, ruled out any further extension to the scheme. The German Government had already increased funding from the original 1.5bn Euro to 5bn Euro in April this year.
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