Call to extend scrappage scheme

The Society of Motor Manufacturers and Traders (SMMT) has urged the government to extend its car scrappage incentive scheme following increased consumer spending in the motor industry.

The scheme, which allows new car buyers to receive a £2,000 discount when scrapping a vehicle that is more than 10 years old, improved year-on-year growth of new car sales in July and August and slowed the decline of vehicle production, according to SMMT monthly figures.

Paul Everitt, SMMT chief executive, said: ‘Consumer confidence is still weak and recovery remains extremely fragile. Avoiding a relapse in demand is critical to the UK economy and an extension to the scrappage incentive scheme, which has already proven its credentials as a cost-effective support mechanism, will ensure a more stable outlook for vehicle demand.’

The scrappage scheme is due to end in February next year. So far, more than 100,000 new vehicles have been registered under the programme with an order backlog of a further 100,000. The SMMT believes this will mean that the scheme will run out of funding by early November.