Scrappage incentives designed to encourage drivers to switch to greener cars are reportedly coming to the UK, even though the government has yet to make an official announcement.
Business secretary Peter Mandelson has so far only confirmed his department is looking into a scheme like the one successfully introduced in Germany, where consumers are being offered €2500 grants to trade-in for scrap any car that is over nine years old. The result is that new car sales surged by 21% in Germany last month and the UK’s Society of Motor Manufacturers and Traders has been urging the government to quickly follow Germany’s lead. While there’s still no sign of an official announcement, Ford has now said it is definitely expecting a UK scheme to be implemented and is adjusting its budget predictions accordingly.
The SMMT says the government’s slow response is actually costing sales as customers wait to see if grants will become available as the industry clearly expects.
Meanwhile Mandy has become embroiled in an embarrassing bout of handbag-swinging with the Bank of England. He told the BBC the bank has responded too slowly to auto industry requests for support with new car financing. The bank responded with ‘puzzlement’, suggesting that providing sector-specific support was ‘clearly and properly a matter for government’.
The Tories have leapt on the spat, describing it as ‘worrying sign of division’ at a time when a united front is required.
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