Government to scratch Scrappage idea?

Published:  26 June, 2020

 While the likelihood of a scrappage scheme to help boost Britain’s COVID-19 impacted carmakers may be fading as government insiders believe it would mainly help overseas manufacturers, the aftermarket is still campaigning against the introduction of such a stimulus programme.

News of a potential scrappage scheme, echoing the programme run in 2009 to help the industry overcome the impact of the 2008 financial crisis, leaked earlier in the month, with high-level communication between government ministers and the SMMT indicating interest in such a scheme.

However, the Financial Times subsequently spoke to senior officials who said that while the idea had been discussed within the Treasury, it was not a definite prospect. “It was being considered at one point, in the same way Labour did something similar…but at the moment it is very unlikely,” the newspaper was told.

The 2009 scrappage scheme did promote new car sales, there was also a downside for the aftermarket. 400,000 extra cars were sold, but most of the cars that were scrapped were being serviced by independent garages. The new cars more likely to end up in dealer workshops.

Some manufacturers are running their own programme. Toyota is offering up to £4,000 off the price of a new car when a vehicle registered before 30 September 2012 is traded in, if the owner had the car for more than six months.

An official scheme is still a possibility however, and the IAAF is continuing to highlight the risks, and is calling for an alternative solution.

Wendy Williamson, IAAF Chief Executive, said: “It’s clear that the government is actively discouraging travelling on public transport and therefore commuters will naturally seek an affordable alternative. All options should remain available to them, and with many perfectly roadworthy cars still being serviced, repaired and maintained, it would be unfair to remove them altogether, forcing commuters to purchase newer, yet unnecessary vehicles.

“Although VMs made much of removing environment-harming vehicles from the car parc in 2009 when the previous scrappage scheme came into force, that argument is not as strong this time round as, ten years on, the car parc is now much newer and more environmentally friendly.”

Wendy added: “Perhaps we should look to other countries and embrace alternative methods rather than scrapping the older vehicle parc entirely. As we’ve stated previously, a more feasible option could be to introduce a limited scheme targeted at those living closest to clean air zones as demand for electric vehicles will be higher in these areas.”

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