The UK government is reconsidering plans to launch a new scrappage scheme to boost car sales and stimulate the economy following the coronavirus lockdown, according to reports.
The car industry was encouraged after it emerged last weekend that the government was planning a scheme to offer new cars buyers incentives of up to £6000 to switch from older petrol and diesel cars to new electric or hybrid vehicles. As first reported by the Telegraph, the government was set to announce the scheme on 6 July.
But the Financial Times is now reporting that there is no guarantee such a scheme will be launched, with four senior officials telling the paper that it is now "very unlikely" such a scheme will be launched. It is understood the Treasury is reconsidering the best way to stimulate the UK economy following the coronavirus crisis and there is a belief that a scrappage scheme would boost overseas manufacturers more than British firms.
With no official word from the government, the new reports could deter potential customers from pushing ahead with buying a new car in the short term. Exclusive research conducted by Autocar sibling brand What Car? shows that 29% of car buyers are already delaying plans to buy a new car post-lockdown in the hope of a taxpayer-backed scrappage scheme.
The What Car? survey of 6632 new car buyers also revealed that nearly 19% have changed the brands they were considering pre-lockdown, and 25% will be moving to a smaller car. Notably, around one in 12 buyers have said they are looking to buy a pure EV as a result of the lockdown, with one in seven likely to opt for a hybrid.
Those figures will provide encouragement that a scrappage scheme focused on low-carbon vehicles could be effective both in boosting sales of such vehicles and getting older and higher-emitting cars off the road.
How could a 2020 scrappage scheme work?
The original government scrappage scheme was introduced in 2010 to boost the economy following the financial crisis. It was based on a £400 million pot, with buyers given £2000 off (£1000 from the government and £1000 from the manufacturer) for scrapping a model aged 10 years or older. Nearly 400,000 cars were bought under the scheme in 10 months. There was some controversy that all cars traded in had to be scrapped, including some roadworthy rare models.
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xxxx
oh no
Another scheme to scrap perfectly good, sometimes interesting, cars and replace them with cars usually made abroad (good for the VW ID). Benefits the wealthy, financed by all including the poorest.
xxxx
Actually
Now we're not in the EU why not limit it to UK made cars, it's UK tax payers money afterall. Limited choice yes but I don't want the scheme in any shape or form.
Overdrive
xxxx wrote:
So you are proposing that in essence that the government puts up tarriffs - as this is what it amounts to - on cars made overseas and manipulate the market in favour of UK made cars? Do you not think that other countries might retaliate in kind?
xxxx
Not the same thing
They're welcome to do the same for their scrapage scheme (it's not a tariff by the way), rather it didn't exist full stop though.
Overdrive
xxxx wrote:
Of ourse they will do the same and probably on other UK exports too, which will hurt UK jobs and businesses, not to mention the possibility of starting a trade war, where nobody wins. And I said it 'amounts' to tariff (not that it is tariff), since this bright idea of yours will make non-UK cars more expensive relative to UK produced cars, thereby having the same impact as a tariff.
Bill the Lizard
Scrapping along
It's in effect what the French are doing by state support of their industry, 8 billion euro stimulus and a big loan for Renault. Best not tell the ECB, they have regulations about that sort of thing. I seem to remember you can only get the scrappage if you buy an electric/hybrid made in France. No doubt someone can enlighten me.
Jeremy
Agree xxxx
This is yet another tax on everyone to the benefit of the wealthy. Why??
Andrew1
The British manufacturers can
Ski Kid
A good idea
Also reduve vat to 10% on uk produced that would help.
Billnyethescienceguy
Terrible Idea
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