Car scrap allowance
Encyclopedia
The UK Vehicle scrappage scheme (also Vehicle discount scheme and Car Scrappage Scheme) is a vehicle scrappage scheme
that was introduced in the 2009 United Kingdom Budget
to encourage UK citizens to purchase a new car or van and scrap an old one that they have owned for more than 12 months. The scheme was extended in September 2009 and again in February 2010 and it now due to finish by the end of March 2010. In February 2010 a separate Plug-in Car Grant to provide £5,000 towards the cost of electric vehicles was announced and it will begin in January 2011.
The government agreed to provide a £1,000 payment towards the purchase of a new car ordered from participating manufacturers after 23 April 2009 and first registered on or after 16 May 2009. to UK citizens who also scrap a car that they have owned for more than 12 months and which was older than 10 years. and manufactures agreed to also provide £1,000 off the list price.
Environmental groups were 'angered' that the scheme was not limited to economical cars. The RAC Foundation
said that many scrapped cars would be in good condition and an estimated 90% of cars purchased under the scheme would be imported. Many cars are already discounted from list price so the saving to purchasers is in reality less than £2,000.
The Institute for Fiscal Studies
criticised the scheme saying that:-
Cars sales increased during the scheme and figures for February 2010 were 26% higher than the previous year. There were concerns that sales would reduce after the end of the scheme and the end of the reduced vat rate of 15%.
The average emissions of new cars sold during the scheme dropped 5.4% from year before .
In March 2010 What Car magazine claimed that the scheme had been a 'smoke-screen' behind which manufactures increased prices and that some price rises "Some of the price rises take your breath away".
In February 2010 the government announced a £230m 'Plug-in car Grant' scheme to provide a £5,000 grant towards the purchase of plug-in electric cars - the scheme will start in January 2011 and a separate scheme, 'Plugged-In Places' will provide some 11,000 charging points in selected cities over the next thee years. There was also talk of a scrappage scheme for old radios ahead of the planned Analogue switch-off
.
by the Society of Motor Manufacturers and Traders
on behalf of UK car manufacturers with support from the UK scheme was introduced in the 2009 United Kingdom Budget
on the 22 April 2009 by the Chancellor of the Exchequer
, Alistair Darling
. The scheme was supported from Lord Mandelson, the Secretary of State for Business, Innovation and Skills, and Geoff Hoon
, the Secretary of State for Transport
.
In September 2009 a further £100m was made available to the scheme which was extended until the end of February 2010. The scheme had been due to run out of money during October and varies bodies including Engineering Employers' Federation, Unite
and the Society of Motor Manufacturers and Traders had lobbied for an extension which was announced by Lord Mandelson at the Labour party conference.
On 5 February 2010 the scheme was extended by a month to run until the end of March 2010 or until the funds were exhausted. In the same month the government announced a £230m 'Plug-in car Grant' scheme to provide a £5,000 grant towards the purchase of plug-in electric cars - the scheme will start in January 2011. A separate scheme, 'Plugged-In Places' will provide some 11,000 charging points in selected cities over the next thee years.
Scrappage program
A scrappage program is a government budget program to promote the replacement of old vehicles with modern vehicles. Scrappage programs generally have the dual aim of stimulating the automobile industry and removing inefficient, high emissions vehicles from the road...
that was introduced in the 2009 United Kingdom Budget
2009 United Kingdom Budget
The 2009 United Kingdom Budget, officially known as Budget 2009: Building Britain's Future, was formally delivered by Alistair Darling in the House of Commons on 22 April 2009...
to encourage UK citizens to purchase a new car or van and scrap an old one that they have owned for more than 12 months. The scheme was extended in September 2009 and again in February 2010 and it now due to finish by the end of March 2010. In February 2010 a separate Plug-in Car Grant to provide £5,000 towards the cost of electric vehicles was announced and it will begin in January 2011.
Overview
The initial scheme, costing the government £300m was introduced in 2009 to support the replacement of 300,000 cars purchased.The government agreed to provide a £1,000 payment towards the purchase of a new car ordered from participating manufacturers after 23 April 2009 and first registered on or after 16 May 2009. to UK citizens who also scrap a car that they have owned for more than 12 months and which was older than 10 years. and manufactures agreed to also provide £1,000 off the list price.
Environmental groups were 'angered' that the scheme was not limited to economical cars. The RAC Foundation
RAC Foundation
The RAC Foundation is a motoring advocacy group that 'explores the economic, environmental, mobility and safety issues relating to roads and motor vehicles and campaigns to secure a fair deal for responsible road users'...
said that many scrapped cars would be in good condition and an estimated 90% of cars purchased under the scheme would be imported. Many cars are already discounted from list price so the saving to purchasers is in reality less than £2,000.
The Institute for Fiscal Studies
Institute for Fiscal Studies
The Institute for Fiscal Studies is an economic research institute based in London, United Kingdom which specialises in UK taxation and public policy...
criticised the scheme saying that:-
- A reduction of emissions per mile from newer cars would be offset by new vehicles being driven more
- That there would be significant environmental costs associated with the production of vehicles
- As fiscal stimulus it will only benefit one industry.
- Many new cars are not produced in Britain though some foreign made vehicles will contain British components.
- A larger part of the subsidy to go to replacements that would have occurred anyway.
- It will mean that fewer sales will occur after the economy has picked up.
Cars sales increased during the scheme and figures for February 2010 were 26% higher than the previous year. There were concerns that sales would reduce after the end of the scheme and the end of the reduced vat rate of 15%.
The average emissions of new cars sold during the scheme dropped 5.4% from year before .
In March 2010 What Car magazine claimed that the scheme had been a 'smoke-screen' behind which manufactures increased prices and that some price rises "Some of the price rises take your breath away".
In February 2010 the government announced a £230m 'Plug-in car Grant' scheme to provide a £5,000 grant towards the purchase of plug-in electric cars - the scheme will start in January 2011 and a separate scheme, 'Plugged-In Places' will provide some 11,000 charging points in selected cities over the next thee years. There was also talk of a scrappage scheme for old radios ahead of the planned Analogue switch-off
Digital radio in the United Kingdom
In the United Kingdom, the roll-out of digital radio is proceeding since test transmissions were started by the BBC in 1990. The UK currently has the world's biggest digital radio network, with 103 transmitters, two national DAB ensembles and 48 local and regional DAB ensembles...
.
History
A car scappage scheme was introduced in Germany on the 13 January 2009 and then in France and Italy. Following a record fall in car sales in the UK and associated redundancies accompanied by lobbyingLobbying
Lobbying is the act of attempting to influence decisions made by officials in the government, most often legislators or members of regulatory agencies. Lobbying is done by various people or groups, from private-sector individuals or corporations, fellow legislators or government officials, or...
by the Society of Motor Manufacturers and Traders
Society of Motor Manufacturers and Traders
The Society of Motor Manufacturers and Traders is the trade association for the United Kingdom motor industry. It "promote the interests of the UK automotive industry at home and abroad".-History:...
on behalf of UK car manufacturers with support from the UK scheme was introduced in the 2009 United Kingdom Budget
2009 United Kingdom Budget
The 2009 United Kingdom Budget, officially known as Budget 2009: Building Britain's Future, was formally delivered by Alistair Darling in the House of Commons on 22 April 2009...
on the 22 April 2009 by the Chancellor of the Exchequer
Chancellor of the Exchequer
The Chancellor of the Exchequer is the title held by the British Cabinet minister who is responsible for all economic and financial matters. Often simply called the Chancellor, the office-holder controls HM Treasury and plays a role akin to the posts of Minister of Finance or Secretary of the...
, Alistair Darling
Alistair Darling
Alistair Maclean Darling is a Scottish Labour Party politician who has been a Member of Parliament since 1987, currently for Edinburgh South West. He served as the Chancellor of the Exchequer from 2007 to 2010...
. The scheme was supported from Lord Mandelson, the Secretary of State for Business, Innovation and Skills, and Geoff Hoon
Geoff Hoon
Geoffrey "Geoff" William Hoon is a British politician who served as the Member of Parliament for Ashfield from 1992 to 2010...
, the Secretary of State for Transport
Secretary of State for Transport
The Secretary of State for Transport is the member of the cabinet responsible for the British Department for Transport. The role has had a high turnover as new appointments are blamed for the failures of decades of their predecessors...
.
In September 2009 a further £100m was made available to the scheme which was extended until the end of February 2010. The scheme had been due to run out of money during October and varies bodies including Engineering Employers' Federation, Unite
Unite the Union
Unite – the Union, known as Unite, is a British and Irish trade union, formed on 1 May 2007, by the merger of Amicus and the Transport and General Workers' Union...
and the Society of Motor Manufacturers and Traders had lobbied for an extension which was announced by Lord Mandelson at the Labour party conference.
On 5 February 2010 the scheme was extended by a month to run until the end of March 2010 or until the funds were exhausted. In the same month the government announced a £230m 'Plug-in car Grant' scheme to provide a £5,000 grant towards the purchase of plug-in electric cars - the scheme will start in January 2011. A separate scheme, 'Plugged-In Places' will provide some 11,000 charging points in selected cities over the next thee years.