THE Government’s “cash for bangers” car scrappage scheme began amid confusion yesterday with top-selling company Ford among some manufacturers delaying taking part.
A lack of clarity over VAT payments and the role of dealers in the initiative led some companies, including Ford and Honda, not to register any new vehicles under the scheme.
Earlier, Prime Minister Gordon Brown and Business Secretary Lord Mandelson, visiting a Nissan dealership in north London, had hailed the scheme under which owners of cars and small vans more than 10 years old will get £2,000 off the price of a brand-new vehicle when scrapping their old motor.
But within hours it emerged that the initiative, introduced to boost new car sales which have slumped for 11 successive months, had run into a glitch.
Ford said it was working to resolve “administrative issues” while Honda said its dealers had been told not to register any cars until there was clarity on a number of outstanding issues.
AA president Edmund King said it was “ludicrous” that hitches had not been sorted out, but the Business Department said it had been clear right from the start that the initiative was between the department and manufacturers, and that it was up to manufacturers themselves to sort out any problems with dealers.
The Department also made it clear that VAT of 15% is added to the price of a new car before the £2,000 reduction – with half the money coming from the Government and the other half from manufacturers – is made.
A Ford spokesman said: “Ford has been part of negotiations between the Government and all vehicle manufacturers on the vehicle scrappage scheme announced in last month’s Budget. As a significant employer and investor in the UK, Ford remains committed to this scheme to stimulate sales within the sector and help protect jobs.
“Based on details which have only become apparent late in these negotiations, Ford is working to resolve some outstanding administrative issues but is confident it can begin sales within a few days of the official start date.
