Why introduce a Scrappage Incentive Scheme in the UK?

Sales of new cars were down 30% in March 2009 which has impacted on some of the UK’s biggest employers –car manufacturers. The UK employs 800,000 people at various levels in the automotive sector supply chain which is desperately in need of a stimulus to avoid catastrophic circumstances.

Fuel economy is a big driver of purchasing a new car. The running costs are significantly reduced with a new car.

The CO2 emissions of new cars are proven to be 13% less than those manufactured a decade ago. This would help towards the governments target for CO2 reductions and help the environment.

Manufacturing of a new car results in a significant proportion of the lifetime emissions however there are thousands of cars in storage that are waiting to be sold so this should not be a restricting argument.

Scrappage works in other European countries.

The VAT generated from the sale of the new car will exceed the subsidy by the government so it should cost the tax payer nothing.