Thursday, 16 April 2009

Car scrappage: another robbery coming up?

The government is poised to raid the taxpayers again, this time to give our money to car manufacturers and dealerships. It's called a car "scrappage" scheme. This idea had been spoken about for some time, but some of us trusted that the government had thought better of it. Now they are tipped to do it. I just hope the tipster has it wrong.

Basically it means that tax-payers' money is given to car buyers in exchange for an old car. They spend the money on a new car, which means that, other than having a new car, they are no better off - unless they were going to buy a new car anyway, in which case, they've just been given a nice present, courtesy of you and me. If you don't drive, you'll really appreciate being forced to pay up to subsidise motorists.

So who profits? Motor manufacturers and traders, of course, which is why the SMMT has been so keen on this scheme. It's good for car salesmen. And it's good for car manufacturers. Unfortunately, most manufacturers of cars bought in Britain are not British, so much of the money the government will be taking from us will be leaving the country.

In the government's favour, at least we are behind France and Germany in this - they've introduced such schemes already. But since French car buyers tend to buy mostly French cars, and a high proportion of Germans buy German cars, their schemes are not quite as foolish as a British one would be.

1 comment:

J Bonington Jagworth said...

Good point, well made. This just the sort of thing that the Law of Unintended Consequences was designed for. For one thing, keeping old cars going is usually a lot 'greener' than buying a new one, which will have consumed vast quantities of resources in manufacture. For another, 'scrapping' means complete destruction, not dismantling, so useful secondhand parts will be in short supply, and businesses who trade in them will fail. This will affect garages who previously maintained older vehicles, too, as we enter an age of disposable cars that will be thrown away as soon as they go wrong. Terrific...