Scrappage Scheme Would Export Jobs
Remove High Taxes on New Cars to Stimulate Sales
The ABD today called on the government to ignore calls for a vehicle scrappage scheme, and put forward its own plan for stimulating the car trade.
The scrappage scheme, in which owners who scrap older cars receive a voucher which entitles them to a discount (£2,000 has been suggested) is being pushed by sections of the motor trade in the hope of boosting sales of new cars. However, the ABD believes that overall the scheme will be bad for jobs and the economy, will be bad for road safety and, contrary to popular belief, of no benefit to the environment.
"The scrappage scheme may stimulate the sale of new cars" explained ABD Chairman Brian Gregory, "But how will that benefit the British economy if those cars are built in France or Malaysia? It would be much better for the economy as a whole to keep older cars on the road — people have their cars repaired at a local garage, they don't send them abroad for service. With the repair industry employing around 600,000 people 1
it makes sense to protect their jobs rather than import more cars and export more jobs."
Scrappage will be bad for road safety. As pointed out by Classic Car Weekly 2
, the people who will be able to take advantage of the scrappage scheme will be the better off — lower income families won't be able to afford a new car, even with the scrappage discount. The better off owners, who will benefit from this scheme, will generally be running superior examples of older cars which are properly maintained. Scrappage will mean that it will be the better, safer, older vehicles which will be scrapped, and not the genuine bangers. This will lead to a shortage of good standard older cars, leading to more bodged up bangers running around and pricing some drivers off the road altogether.
Scrappage is claimed to have environmental benefits, but these are ridiculed by green groups. The ABD, of course, disagrees with the green lobby over the relationship between carbon dioxide and global climate, but agrees with the Green Party's spokesperson on Sustainable Development, Professor John Whitelegg, when he says that "Scrapping a perfectly good car is an outrageous thing to do" 3
, and a spokesman for the Environmental Transport Association who said "Car scrappage schemes ... have very little to do with the environment, and to suggest otherwise is misleading" 4
. The ABD even finds itself in the rare position of agreeing with environmental writer George Monbiot when he said "It would make more sense for the government to pay us to keep our old bangers on the road" 5
If the government does want to stimulate new car sales, the ABD has some suggestions:
- Scrap the high rates of Vehicle Excise Duty planned on new cars, which penalise the higher end models which are the only cars which it is economic to build in Britain. Taxes of up to £950 (first year) and £455 (subsequent years) are meant to be punitive, and it's disingenuous for the government to hand out a grant for the destruction of a perfectly serviceable car just so the buyer can pay more tax on the new one. VED is supposed to be a fixed charge for using the road network, turning it into an incentive to buy city runabouts defeats its intended purpose.
- Make the Vehicle Excise Duty free for the first three years of the car's life for a limited period. As well as making new cars more attractive to buyers it would spread the cost to the government over the three years instead of it all being paid in one go as a scrappage allowance.
The ABD believes that such policies would benefit British jobs, as well as helping to keep the cost of older cars down, allowing struggling low income families to sensibly upgrade cars which have reached the end of their useful lives.