07.08.09: It'd be suicide to pull scrappage plug

Time 12 years ago

scrappage-big-boost-to-new-car-salesWE’VE been staunch supporters of the car scrappage scheme since before it even got the nod.

Our Scrap Scheme Now campaign called for he government to make a decision on the scheme months before the Budget back in March – and we’ve been following its progress online and in the magazine since it kicked off.

So when yesterday’s email pinged up from the SMMT, showing sales figures were up for the first time in 15 months in July, I felt a certain pang of happiness.

There were many doubters in our industry – and the press – who said the scrappage scheme was the wrong thing to do.

We were always of the opinion that it didn’t matter whether it was right thing to do, just that it was some form of action; a sliver of help from the government for the ailing car industry.

Now many are saying that these sales rises are only temporary, that those who want to take advantage of the scheme already have.

But again I think they’re wrong. Many buyers will be holding off for the new plate change at the end of August, so I think these figures won’t be the first month of rises we can look forward to.

So what about when the £300m the government allocated to the scheme runs out? Well, I think there’s a chance it might just continue. You’ve got to remember that on cars retailing at or above the £8,000-ish mark, the government actually makes money on the VAT returns.

The scrappage scheme is set to officially end in March next year – just a few weeks before a General Election is likely.

And what government – especially one as deep in trouble as Gordon Brown’s – is going to anger the 800k people, directly or indirectly, employed by the car industry in the UK by pulling the plug on this?

He might not be the sharpest knife in the Westminster block, but I’m sure his ‘deputy PM’ Lord Mandelson won’t miss this trick…

Time will only tell.


News: New car sales RISE in July

James Baggott's avatar

James is the founder and editor-in-chief of Car Dealer Magazine, and CEO of parent company Baize Group. James has been a motoring journalist for more than 20 years writing about cars and the car industry.

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