The government is considering incentives to encourage drivers to replace old polluting cars with new ones, according to Business Secretary, Peter Mandelson.
In some countries, such as Germany, Spain and France, what are known as “scrappage schemes” are already in place where motorists are paid to trade in their old vehicles in favour of new less polluting ones.
The benefits are seen as being positive in two ways, firstly, it reduces the pollution per vehicle ‘permanently’ and of course, at the moment, with the motor trade going through difficult times, it will give this industry a leg up as well.
Mandelson’s officials at the Business Department are saying that the schemes currently in place in other countries are interesting, but must be properly examined, however they are not yet convinced how a scrappage scheme will provide a stimulus for demand and value for money — but they will continue to assess the evidence on costs and benefits with the industry and others. Rumours suggested £2000 could be a likely amount, but that is only rumour.
One of the problems is that whilst the scheme will undoubtedly work on the pollution aspect, it’s not certain just how much help it will give the beleaguered UK motor trade, as most new cars sold in the UK are imported and so this initiative could be seen as subsidising foreign car manufacturers. However, on the other hand, even if you ignore where the vehicle was manufactured, there are still hundreds of thousands of people employed in the UK, in the non-manufacturing side of the motor industry, perhaps within dealerships for example that this initiative would benefit.
What ever your views about the motor industry in general, it’s a huge employer within the UK and companies such as Toyota and Nissan have invested hugely in the UK, creating thousands of jobs, but they might just have easily made those investments elsewhere in Europe. So whilst we might not want to introduce unusual schemes like this, I guess the directors of these car companies will be looking at where they will be better off employing future investments and it’s logical, that this will be in countries where the industry is better supported and frankly, at the moment, that isn’t here in the UK.
