Scrappage scheme stimulus measures now ‘critical’ to boost confidence in car market

2 min

13 shares, 91 points
Scrappage scheme stimulus measures now ‘critical’ to boost confidence in car market

Mike Hawes, Chief Executive of the SMMT said government super was urgently needed. 

He said: “We urgently need [the] government to expand its strategy and introduce sector-specific measures for UK auto. 

“[This will] support cash flow such as business rate holidays, tax cuts, and policies that provide broader support for consumer confidence and boost the big ticket spending that drives manufacturing. 

“Until critical industries such as automotive recover, the UK economic recovery will be stuck in low gear.”

READ MORE: Scrappage scheme may see diesel prices dramatically fall

They also said there were no plans to introduce a scrappage scheme despite previous reports which had indicated a scheme would be launched. 

The proposals would have seen a £6,000 scrappage scheme launched this July to boost sales of electric cars. 

Owners of petrol and diesel vehicles would be given the financial boost if they ditched their polluting vehicles for fully electric models. 

It was seen as an easy way to help struggling manufacturers after the coronavirus shutdown and help the government meet their 2050 zero carbon targets. 

Ministers quickly tried to cool the rumours before the government officially confirmed the scheme would not be introduced. 

No reason was given for scrapping the policy but the decision could be based on the costs of implementing the scheme. 

The 2009 scrappage scheme gave drivers up to £2,.000 to switch tehri car if it was over ten years old. 

But the scheme cost the government £300,000,000 as 300,000 cars were replaced under the programme.

Instead of introducing the scheme, Chancellor Rishi Sunak announced an extra £10 million worth of funding to “scale up” manufacturing in electric car technology. 

The money will also help towards proposals for a new UK ‘gigafactory’ which could increase the availability of electric cars and reduce costs. 

Last week the SMMT hit back at the proposals as they claimed the Chancellor had “stopped shorty” to help the sector. 

Mr Hawes said: “It’s bitterly disappointing the Chancellor has stopped short of supporting the restart of one of the UK’s most important employers and a driver of growth. 

“The automotive sector has been particularly hard hit, with thousands of job losses already announced and many more at risk. 

“Of Europe’s five biggest economies, Britain now stands alone in failing to provide any dedicated support for its automotive industry, a situation that will only deter future investment.”

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