The scrappage allowance: a missed opportunity?

The vehicle scrappage scheme, introduced by Peter Mandelson, ended a few months back and can only be seen as a resounding success; helping to revitalise the flagging UK motor industry and provide an economic boost during the recent recession.  The total cost of the scheme is said to have been £400m, but did the Labour government miss a trick?

Under the rules of the scheme, which started in May 2009, UK citizens were allowed to trade in their old car (provided it was at least ten years old, and they had owned it for at least 12 months) for £2,000 off a new car (£1,000 provided by the government, £1,000 provided by the manufacturer).  The rules also dictated that the old car must be scrapped and must not be sold on.  The idea was that the increased sales would stimulate the UK motor industry and the economy whilst taking older vehicles off the road.

In the first month over 35,000 vehicles were scrapped including a 1968 Morris Minor (value of at least £3,250), a Porsche 944 (£990-£10,000) and a Jaguar XJS (£795-£22,000).  Now, dear reader, I am sure that the values mentioned here are starting some wheels turning in your head.  I am sure they they will turn a little faster when I tell you that the £400m designated for the scheme would have allowed 400,000 cars to be scrapped.  With the information above, I am sure that not all of the 400,000 cars were clapped out Ladas or Skodas.

In fact, experts suggest that almost all of the vehicles that are set to be scrapped under the scheme are still roadworthy and could be driven for at least another five years.  Given the fact that in order to trade your vehicle in it had to have a current MOT, it could be said that all of the vehicles set to be scrapped were roadworthy at the time of the trade-in.

Over 14,000 vehicles are still waiting to be scrapped at Thurleigh airfield in Bedfordshire, one of a number of 'holding areas' throughout the country.

Of course the final cost of the scheme will run to far more than £1,000 per car, with the government having to pay for these cars to be scrapped and disposed of.  It all seems a little odd when the combined value of the 400,000 vehicles is said to be at least £28,000,000.

By now, I'm sure I don't even have to tell you the point I'm trying to make but, just in case Peter Mandelson happens to be reading, I shall explain it anyway.

Why did the government of the time decide that all the vehicles traded in under the scheme must be scrapped, regardless of state of repair or value?  Yes, it is a noble gesture to suggest that permanently removing these vehicles from the country's roads will help reduce emissions, but even that suggestion might not be entirely accurate.  Emissions will have increased owing to the increased production of new cars, people with new cars are more likely to drive them more often, and there was no requirement to purchase an environmentally friendly car anyway.  Given the financial situation the country is in, it would have been much more beneficial to have sold the cars.

Take a look at the circled cars, certainly worth at least £1,000 each don't you think? (Click for bigger)

Of course, it would probably have been impossible to have sold all the cars traded in under the scheme, but here comes another idea.  Why not allow those who could not normally afford a car to register into the scheme and receive a perfectly serviceable car free of charge?  Failing that, the government could always take them on and place them into the ministerial pool.  I'm sure a little Daihatsu Copen would be much cheaper to run and maintain than a gas-guzzling Jaguar.

4x4s as far as the eye can see... how much money is there just sitting in this one picture?

Either way, whilst the scrappage scheme was certainly a success, I reckon that with a little more thought the government could have benefited just as much as the general public.