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Mandelson extends car scrappage scheme

The Government has announced a £100 million increase to the car scrappage scheme to build on its success in boosting consumer demand.

So far 227,750 orders have been placed through the scheme. The increased funding enables the scheme to fund a further 100,000 vehicles, bringing the total budget to £400 million and covering up to 400,000 vehicles in total.

Alongside the increased funding, the Government will work with manufacturers to extend the benefits to van owners with vehicles over eight years old rather than the current ten year requirement. Car owners will also get a boost, with the age qualification changed by six months to extend the benefits to cars registered on or before 29 February 2000.

Car scrappage firm manager Graham Price told MRW that the system will help bring in more scrap. He said: I think that the authorised treatment facilities and scrap end of the job will be very pleased at this news.

But he also said that he was surprised at the speed of the announcement as the current £300m scheme has not expired yet and was due to expire next month.

Business Secretary Lord Mandelson said: The sector has been strongly affected by the recession, but the scrappage scheme has delivered a boost to manufacturers and the supply chain. We have listened to the concerns of manufacturers and are increasing the funding of the scheme to £400m.

But we must make sure that the help we do offer is targeted, limited and proportionate. This is not a blank cheque to the auto manufacturers but recognition that there is still a short-term challenge to boost demand and confidence in the sector.

The extension continues as a Government and manufacturer partnership, with matched funding providing the £2,000 discount for each scrappage order. It will come to an end on 28 February 2010 or when the funding runs out, whichever is sooner.

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