Scrappage scheme 'boosts consumer confidence'

The scrappage scheme has helped boost consumer confidence, according to a group that represents car makers.

The Society of Motor Manufacturers claims that the initiative has been a success, with it accounting for at least 25 per cent of new car registrations each month since it was introduced last year.

“Bread and circuses”

The £2,000 grant available to those buying a new car when they scrap a vehicle that is at least 10 years old has undoubtedly proved popular, but is accused of being as financially questionable as it is environmentally spurious.

A spokesperson for the Environmental Transport Association (ETA) said: “Sustaining the capacity to produce cars that consumers are unwilling to pay for in full distorts competition and inevitably creates the need for further and prolonged state intervention. After all, these sales have not been conjured from the ether; in most cases they simply purchases that have been brought forward.”

Furthermore, the scrappage scheme is a hugely expensive way of lowering our driving emissions. The new vehicles bought under the initiative might well emit 25 per cent less carbon than those that are scrapped, but our conservative estimate of the cost to the tax payer is £370 per tonne of CO2 emissions avoided – more than four times the rate per tonne than is thought necessary as a carbon tax.