In a letter sent to Mr Darling last week, the body, which represents the UK business sector, said that a temporary scheme could be introduced at a cost of £500 million to the Treasury, and would help to boost spending and reduce carbon emissions.
Not only would this bring forward consumer and business spending, it would also help reduce carbon emissions
John Cridland, deputy director-general, CBI
Scrappage schemes for end-of-life vehicles (ELVs) have already been introduced in countries such as Germany and France, where vehicle owners who trade in old cars are paid up to £2,000 when they buy a new, more fuel-efficient model.
The introduction of a scrappage scheme for old cars and waste electrical equipment could lead to the UK's vehicle dismantlers, scrap metal yards, shredders and waste electrical and electronic equipment (WEEE) treatment facilities dealing with significantly larger amounts of material.
The CBI's deputy director-general, John Cridland, said: “Scrappage schemes, at a relatively modest exchequer cost, would encourage consumers and businesses to replace old inefficient cars and vans, fridges and washing machines with the latest efficient models.
“Not only would this bring forward consumer and business spending, it would also help reduce carbon emissions,” he added.
The CBI is the latest industry organisation to call for the introduction of a financial incentive to encourage vehicle owners to scrap their old cars and vans and buy newer models.
On Friday (March 20), the Automobile Association (AA), said that a major fall in new car production figures in February 2009, compared to the same month a year earlier, meant that the government should consider whether or not to introduce a scrappage scheme.
“The plummeting car production figures of 57%1 show the urgent need for a boost to this vital industry,” said AA president Edmund King.
“Car scrappage schemes in countries such as Germany are already having a positive effect on sales. The government needs to decide now whether or not they will introduce a financial incentive to buy new cars,” he added.
PFI
In its letter, sent to the Chancellor ahead of the April 22 Budget, the CBI also welcomed the infrastructure fund for PFI projects, including waste treatment schemes, that was announced earlier this month (see letsrecycle.com story).
The CBI's director-general, Richard Lambert, said: “They should enable key projects to progress, protecting jobs in the construction and services industries. The existing plans must be fully and speedily delivered.”
And, he called for the government to continue its support for the PFI approach. commenting: “The government must also maintain its commitment to the partnership model, and not be tempted to fall back on traditional design-and-build approaches.
“The many benefits of PFI and other partnership approaches include better long-term planning, increased financial transparency, and risk-sharing that creates incentives for improved services. High quality, value-for-money infrastructure and services are the result,” he added.
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