THE AA this week called on the Government to introduce a cash incentive scheme to encourage motorists to replace old cars with new ones, claiming it would help reduce vehicle emissions and boost new car sales.
The motoring organisation said it will discuss the idea with the Treasury later this week, warning that the “dramatic” drop in new car sales already led to reduced vehicle production in the UK, with a knock-on effect for dealers and suppliers.
AA president Edmund King said: “A vehicle scrapping scheme has potential to reduce emissions, reduce accidents and their severity whilst giving a boost to the UK motor industry.
“There are many benefits from getting older gross polluters off the road from environmental to safety. In terms of cost such a scheme could be self-funding as the Government will benefit from new car tax, VAT and reduced carbon and accident costs. The UK economy would also benefit from an increase in new car sales.”
Car dealers across Merseyside will also be hoping for Government support.
Sue Robinson, director of the Retail Motor Industry Federation’s National Franchised Dealers Association, said: “For the economy to recover, interest rates must be cut, confidence needs to be returned to the banking system, and consumers need to feel safe in their jobs. However, it is vital that the impact of any interest rate cuts reaches the consumer for there to be any effect.
“Lower interest rates will help bring stability to the economy, and reassure consumers, and help business. In the long run it is good for the economy.”
Prof Peter Cooke, KPMG automotive professor at the University of Buckingham, agreed the sales decline will not stop any time soon, and said Government support could give the industry a much-needed shot in the arm.
He said: “In North America, the big players have gone effectively for government support to enable them to move more rapidly in their environmental programmes. That sort of support would be extremely beneficial.
“The people who would benefit most would be JLR. They’ve got a lot of things happening in terms of green technology, and it’s very expensive to speed up the development schedule.”
Asked whether he expected Government intervention, he laughed: “They weren’t going to nationalise banks.”
He added: “We’re in the sort of economic turmoil we haven’t seen before. Are we going to look to rescue our industries?
“It’s a very complex situation and I don’t think the Government has made up its mind. It’s got bigger issues in terms of getting the banking systems working again.”
alistairhoughton@dailypost.co.uk
