The Government has denied reports ministers are warming to the idea of a scrappage scheme to boost new car sales and is instead insisting the industry buy into its £2.3 billion aid package.
A national newspaper claimed the Department for Business Enterprise and Regulatory Reform (BERR) is backing a plan to offer motorists up to £2,500 in taxpayer funded handouts for trading in their old car for a new or nearly-new model.
A BERR spokeswoman said: “Reports of our backing the scheme didn’t come from us. Our official line is that we are considering it. There is no timetable for when we will reach our decision.”
A Treasury “insider” put its position on scrappage more strongly speaking to Automotive Management he said “We don’t believe it’s the right thing to do for various reasons,” however he didn’t elaborate further.
The Government appears determined to see industry take-up of its £2.3 billion Automotive Assistance Scheme announced by Lord Mandelson in January.
Exchequer Secretary Angela Eagle said: “The Government understands that, in theory, a car scrappage scheme could help promote the purchase of lower-emitting cars – but there are questions about how effective this would be in practice.
“This is why Government has put forward measures focused on targeting the production and sale of low-emitting vehicles, by providing loan support to manufacturers, as well as a further £250 million for supporting ultra low-carbon vehicles.”