Why a scrappage scheme won't save UK's industry

Published: 14 April 2009

The likely introduction of a UK car scrappage scheme, copying similar initiatives in France, Germany and many other EU countries, will do wonders for the sale of low-cost Japanese and Korean cars. But an initiative designed to kick-start UK car sales will do little to help cars made in the UK. Receiving a £2000 (or so) government rebate to trade in your 10-year old Fiesta on a new or nearly new car is hardly going to help shift Bentleys, Aston Martins, Range Rovers, Jaguars or maxi-priced Minis. But watch those Kias fly from the showroom! (In Germany, the big beneficiaries have been makers of cheap small cars. Germans who part-exchange ageing bangers don’t trade up to new BMWs.)

UK car production plummets, so clearly British car makers need all the government help they can get. But when your home-grown car makers are more Paul Smith than Primark, incentivising banger owners to buy British is likely to be as effective as handing out discount vouchers to Gordon Ramsay restaurants at the local Burger King.

British makers overwhelmingly make pricey premium cars. (Even the Japanese ‘transplant’ companies manufacturing in the UK chiefly make mid-range cars, not cheap little ones.) The best way to help our local makers would be to cut tax rates for the rich, encourage hedge funds and incentivise banks to pay big bonuses. All of which are about as likely as Sir Fred Goodwin being the next chancellor of the exchequer.

By Gavin Green

Contributor-in-chief, former editor, anti-weight campaigner, voice of experience