In today's (April 22) Budget speech, Mr Darling said that the planned scheme would be introduced in mid-May in a bid to support the car industry following a steep fall in new vehicle sales during the economic downturn.
“In order to help the car industry and retail trade, I can announce that a scrappage scheme will be implemented next month.”
“It will provide motorists with a £2,000 discount on new vehicles bought when they trade in cars over ten years old,” he added.
The government has said it will provide £300 million towards the initiative, with funding being “matched by manufacturers participating in the scheme”, and that the scheme will only run until the start of March 2010 or when the money runs out – whichever is sooner.
Scrap
The scheme – which also applies to commercial vans weighing up to 3.5 tonnes – is likely to result in scrap metal dealers and vehicle dismantlers being expected to deal with a larger number of end-of-life vehicles than is currently the case.
However, BERR has today revealed that as the scheme is a voluntary initiative, not all vehicle manufacturers and dealers will participate.
And, commenting on the way the scheme will work, BERR said:”The dealers will do all the paperwork for motorists participating in the scheme and arrange for the old vehicle to be scrapped.
“The dealer will check that the vehicle being traded in and the new one being bought qualify under the scheme,” it added.
It is believed that this approach could mean that dealers only send vehicles for dismantling and recycling via one of the 500 authorised treatment facilities (ATFs) which are contracted to allow car manufacturers to meet their obligations under the End-of-Life Vehicle Directive.
This would mean that the 1,000 or so ATFs who are not members of either the Autogreen or Cartakeback service provider networks would not be used under the scheme, and as such would not be able to take advantage of any revenue from scrapping the vehicles.
Commenting on the scheme, the secretary of state for business, Peter Mandelson, said: “This is targeted action with a capped budget and for a limited time, designed to boost the whole motor trade.
“This will ensure that the benefits of a scrappage scheme are balanced with the needs of other sectors of the car industry such as the second hand market, maintenance and repair businesses, and other industries that produce consumer durables or on the taxpayer,” he added.
Calls
The idea of a scrappage scheme had already won support from organisations including the Confederation of British Industry (see letsrecycle.com story) and Society of Motor Manufacturers and Traders (see letsrecycle.com story) prior to today's announcement.
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