Has the Scrappage Scheme Worked?

The economic recession has had an impact on the car manufacturing industry in the U.K. over the last year. To combat this, the U.K. Government introduced the scrappage scheme to give more buyers the necessary cash to make a purchase. The scheme works by allowing the owner of a vehicle over 10 years old or more to trade it in and receive two thousand pounds towards the cost of a new vehicle - specifically, vehicles registered before 31st August 1999. The owner must have been in possession of the vehicles for 12 months or more to deter people picking up old cars to use for the scheme.

The scrappage initiative was introduced in April of this year by the business secretary, Alistair Darling, with the intent of injecting some cash into the vehicle industry to stimulate sales and ease the effects of the recession. It also has the benefit of taking older vehicles off the road which will lead to more fuel efficiency. The used taxi industry especially has benefited from the scrappage scheme as in some cases taxi drivers have been able to trade up to newer and more efficient models.

After six months of the scheme it looks like it's had a positive effect. The National Institute of Economic and Social Research have declared the recession over after figures were reported showing the manufacturing sector to be showing its strongest growth in eighteen months. The vehicles industry has been stronger than expected. The office for national statistics have stated that manufacturing grew by 0.9 percent in July which was the biggest jump since the beginning of 2008.

However, others point to rising unemployment as a sign that, despite the positives, there is still a long way to go before economic growth and stability returns to pre 2008 levels.