The scheme was first introduced in May 2009 and has offered car and van owners £2,000 to scrap their old vehicle and buy a new one. So far, 227,750 orders have been placed through the scheme and it has guaranteed a steady flow of vehicles through scrap yards during the recession.
The increased funding enables the scheme to fund a further 100,000 vehicles, bringing total budget to £400 million and covering up to 400,000 vehicles in total.
The extension continues as a Government and manufacturer partnership, with each £2,000 grant made up of £1,000 from government with matched funding from vehicle manufacturers. It comes after manufacturers yesterday called for the scrappage scheme to be extended (see letsrecycle.com story).
Alongside the increased funding the Government will work with manufacturers to extend the benefits to van owners with vehicles over 8 years old rather than the current 10 year requirement. Car owners will also get a boost, with the age qualification changed by 6 months to extend the benefits to cars registered on or before 29 Feb 2000 (V registration).
Lord Mandelson
Announcing the move at the Labour party conference in Brighton today, Business Secretary Lord Mandelson said: “The car scrappage scheme has been so successful, the car industry has asked if the money can be topped up. I am extending the car scrappage scheme with extra money for an additional 100,000 cars and vans”.
He added: “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 scheme will come to an end on February 28 2010 or when the funding runs out, which ever is sooner and is expected to see many more end of life vehicles sent to scrapyards.
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