Government will not pump any more cash into scrappage
12 November 2009

The UK’s scrappage incentive scheme will not be extended again, despite improved sales.

In September, business secretary Lord Mandelson announced that the incentive would be extended for a further 100,000 cars.

It will mean an extra £100m from the government towards the scheme.

But despite buoyant sales figures since scrappage was introduced the Department for Business, Innovation and Skills has told Autocar there will be no further extension.

“Industry and Government are agreed that the scrappage scheme will remain limited and will close at the end of February 2010 at the latest, as originally planned,” said a spokesman, “it will not be extended beyond this.”

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Comments
16

12 November 2009

Oh dear, the SMMT, Autocar, & Auto Express are going to start whingeing again...

12 November 2009

Hyundia and KIA are going to be gutted....

12 November 2009

Good. It's time to start spending our tax pounds more sensibly. What about giving a boost to transport as a whole by mending the bl**dy roads!!! Or better still, by supporting OUR manufacturing and motor industry instead of Korea's.

12 November 2009

Ha ha! general election May 2010.

announcing end of 'Scrappage' means last minute rush by saddo sap punters, combined with 'beat the Jan 2010 VAT increase' berating, guaranteeing buoyant monthly sales reporting by BBC et al through to G.E., with orders placed in Dec 09-Feb 10 period being registered in Mar-May 2010. plus it leaves the ~30% immediate slump in sales, post-Scrappage/VAT back to 17.5%, in the lap of the incoming government, making them look the cause of. who said politicians don't put the country's interest first!

R32

12 November 2009

[quote noluddite]

Good. It's time to start spending our tax pounds more sensibly. What about giving a boost to transport as a whole by mending the bl**dy roads!!! Or better still, by supporting OUR manufacturing and motor industry instead of Korea's.

[/quote]

Couldn't agree more. The government are so quick to spend money on propping up business when it suits them - meanwhile people (like me) who pay £400 for their cute little tax disc have to drive over potholes and broken up roads all across the country. It was a flawed scheme from the beginning, with no real thought behind it and rushed through to make it look like the government was doing something to "help". Lower taxes for everyone - that would help everyone. Lower fuel tax at the pumps - that would help everyone. Better roads infrastructure - that would benefit everyone. If you're car didn't meet the governments criteria for the scrappage scheme you hadn't won your £2,000 off your next car - an unfair system that rewarded certain drivers of certain cars and did nothing for those whose cars weren't "old enough". Time to bring scrappage to an end so the government can go waste taxpayers money somewhere else. Rant over.

12 November 2009

I think you guys may be missing something here, it's not actually costing the tax payer anything at the moment! the governement are only providing £1000 per car with the manuafcturesr, dealers etc putting the other £1000 and all the admin costs etc. With VAT at 15% that means that unless a car costa less than £6666.66 the £1000 from the government is recouped!! I suspect the actual average of a "Scrappaged" car is at least £9000, so the government is gaining £1350 for every £1000 spent. I know there are some people who would have bought cars anyway without scrappage, but I suspect the whole scheme has at worst cost nothing at best provided extra funds to the Government!

12 November 2009

[quote AverageBloke]

I think you guys may be missing something here, it's not actually costing the tax payer anything at the moment! the governement are only providing £1000 per car with the manuafcturesr, dealers etc putting the other £1000 and all the admin costs etc. With VAT at 15% that means that unless a car costa less than £6666.66 the £1000 from the government is recouped!! I suspect the actual average of a "Scrappaged" car is at least £9000, so the government is gaining £1350 for every £1000 spent. I know there are some people who would have bought cars anyway without scrappage, but I suspect the whole scheme has at worst cost nothing at best provided extra funds to the Government!

[/quote]

you a dealer? vested interest? or just ignorant of the facts?

Hyundai(/Kia) have taken one-fifth of all the 200,000+ scrappage funded sales so far. The vast majority of their 'scrappage specials' - see their web sites - come in at prices below, in some cases well below, the price where the govt. makes back its £1,000. Same goes for the vast majority of Fiat's scrappage-funded sales for its Panda and so on. So that's the 'net revenue positive' lie put to bed for the propagandists of the scrappage scheme

More serious still for UK is the massive trade deficit caused by importing several extra hundred thousand foreign vehicles, as shown by the latest trade figures. In September the UK's trade deficit in goods grew by over a £billion from £6.1 to £7.2bn caused mainly by the surge in car imports.Once upon a time running a vast and still increasing trade deficit would have been seen as economic failure for a country - as in the late 60s period in UK, Now, of course, with money printing by the Bank of England no one cares if the UK boosts its GDP/apparent wealth artificially by buying more than it sells abroad. This too is of course false and folly. The day of reckoning is approaching - that of a cataclsymic fall in the value of the currency brought about by out of control trade deficits - made far worse by policies like the scrappage scheme - and money printing devaluing the vakue of the country's currency. So, in conclusion, enjoy your 'revenue positive' scrappage boost now, because the day of payback is just around the corner, with either a downgarding of UK's sovereign debt rating or a totally collapse currency, which will mean the end of mass foreign car purchases.

12 November 2009

[quote kairoo]So, in conclusion, enjoy your 'revenue positive' scrappage boost now, because the day of payback is just around the corner, with either a downgarding of UK's sovereign debt rating or a totally collapse currency, which will mean the end of mass foreign car purchases.[/quote]


So, having pronounced the doom ahead, what do you propose we do about it? Obviously the voters are going to kick out Brown and his monkeys at the election, but do you think sly boy Cameron will be any better?

12 November 2009

[quote sorrel]

[quote kairoo]So, in conclusion, enjoy your 'revenue positive' scrappage boost now, because the day of payback is just around the corner, with either a downgarding of UK's sovereign debt rating or a totally collapse currency, which will mean the end of mass foreign car purchases.[/quote]


So, having pronounced the doom ahead, what do you propose we do about it? Obviously the voters are going to kick out Brown and his monkeys at the election, but do you think sly boy Cameron will be any better?[/quote]

it's far, far too late for any pain-free solution but the only correct solution is basically to reverse course: raise interest rates immediately by one or two per cent, stop money printing(QE), stop any current or planned actions to buy bank toxic debt and encourage saving not further debt taking-on by the populace. This will of course truly crash the housing market, which is the one measure and policy that everything is currently geared to. so it's basically a choice - prop up insane house price levels with 2007-level credit levels and money printing to pay one's own govt. debt, to pay wages to the public sector, or prop up one's currency in order to stop runaway inflation through imports and rebalance demand away from domestic consumption to the exports-focused manufactring sector. and before anyone says that a weak pound is good for manufacturing and exports take a look at recent trade figs. there has been no weak-pound induced exports boost. what SME manufacturing companies need above all is access to cheap, stable financing, not the 10% plus overdraft financing levels or 30%+ credit card levels imposed by RBS, Lloyds et al as they seek to rebuild their insolvent capital position off the backs of genuine business whilst they get effectively free money handouts from the central bank. Having a scrappage scheme when >80% of all cars were already imported was insane. the data, in the form of the trade figures and the dubiousness of the refunded VAT claims, is now there for all to see.

12 November 2009

[quote kairoo]

it's far, far too late for any pain-free solution but the only correct solution is basically to reverse course: raise interest rates immediately by one or two per cent, stop money printing(QE), stop any current or planned actions to buy bank toxic debt and encourage saving not further debt taking-on by the populace. This will of course truly crash the housing market, which is the one measure and policy that everything is currently geared to. so it's basically a choice - prop up insane house price levels with 2007-level credit levels and money printing to pay one's own govt. debt, to pay wages to the public sector, or prop up one's currency in order to stop runaway inflation through imports and rebalance demand away from domestic consumption to the exports-focused manufactring sector. and before anyone says that a weak pound is good for manufacturing and exports take a look at recent trade figs. there has been no weak-pound induced exports boost. what SME manufacturing companies need above all is access to cheap, stable financing, not the 10% plus overdraft financing levels or 30%+ credit card levels imposed by RBS, Lloyds et al as they seek to rebuild their insolvent capital position off the backs of genuine business whilst they get effectively free money handouts from the central bank. Having a scrappage scheme when >80% of all cars were already imported was insane. the data, in the form of the trade figures and the dubiousness of the refunded VAT claims, is now there for all to see.

[/quote]

I can buy into what you're saying here, so, who is likely to do this? Certainly none of the three parties that have any chance at the election. My contentious theory is that democracy actually doesn't work. It's the sole reason we get the choice between the hopeless or helpless every time. Any independent with half a decent idea and manifesto has no chance at all unless they're wealthy enough to field enough candidates and have deep enough pockets for the huge advertising campaign necessary. If we ever scrap the ludicrous electoral system we currently have, then maybe we have a chance...

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