Scrappage extended

Posted on 28 Sep 2009 by The Manufacturer

Business Secretary Lord Mandelson has announced an extension to the scrappage scheme in a Labour Party Conference speech which heavily advocated an increased emphasis on manufacturing.

The original £300m pot for the scrappage scheme – which offers a £2,000 discount to buyers of new cars when they scrap one over ten years old (£1,000 each from gov. and manufacturer) – is set to run dry next week. But Mandelson has this afternoon announced that another 100,000 sales will be catered for through the programme.

He and Chancellor Alistair Darling had been lobbied by trade bodiesincluding EEF, the manufacturers’ organisation; the Society of Motor Manufacturers and Traders (SMMT); and the British Chambers of Commerce to not let the programme end. The organisations warned that the increased demand inspired by the scheme would not remain without it.
And their pressure has paid off.

“Our car scrappage scheme has been so successful the money is running out,” said Mandelson. “The industry has asked that the scheme be topped up. Conference, we cannot do everything but that does not mean doing nothing. So today I am extending our popular car scrappage scheme with extra money for an additional 100,000 cars and vans.”

The scheme has also been extended to include vans that were made before 2002.

Continuing his speech at the Brighton conference, Mandelson said voters should not forget that the Tory party, guided by leader David Cameron and shadow chancellor George Osborne, was against implementing the Scrappage Scheme, as it was a raft of other recession relieving initiatives.

“I hope these two can find the humility to acknowledge that at every point Tory policy would not just have put the recovery at risk but have made this recession deeper, longer and far far worse,” said Mandelson. “I tell you. Withdrawing our help for the economy now as Mr Osborne demands would choke off recovery before it has even properly begun.”

Mandelson’s announcement was received warmly by those that had called for it.

“It will help to stimulate demand, giving more consumers access to it, and create a bridge to a period when economic growth is strengthened and more sustainable,” said SMMT chief Paul Everitt. “The additional 100,000 vehicles should help to counter the likely negative impacts of a return to the higher rate of VAT and the introduction of first year VED rates.”

Mandelson’s focus on manufacturing did not stop with automotive though, as he called for “less financial engineering and more real engineering”.

“Some people think that Britain is a post-industrial country that doesn’t make anything anymore,” he said.

“Well, someone needs to tell them that we are still the world’s sixth biggest manufacturer. And we will remain a modern manufacturing nation as long as I and the Government remain in our jobs.

“We’re one of the world’s biggest investors in Research & Development. But we still do the R better than the D and that must change.”

He identified low carbon cars and aircraft, plastic electronics, life sciences, industrial biotechnology, and renewables as key areas that the UK should focus on.

Mandelson received rapturous applause and a standing ovation for his speech, a reaction that was no doubt aided by his rhetorical ruby rule-of-three ending he employed with “Win for our Party, win for our country, win for the British people.”