Scrapping cars

The government scheme to pay a bonus to all who replace a car more than 12 years old with a new one seems to be another flop.

Car sales are still falling month by month. Critics of the scheme predicted that anyone who hoped to take advantage could delay purchase until the scheme started. Perhaps this explains the falling sales hitherto, so we might expect a modest increase in sales soon.

The scheme was a "try anything" policy. People owning ten year old cars were not likely to want to buy a brand new one, not least because some costs will rise - insurance, depreciation, for example.

The scheme was weakened to the extent that the suppliers must absorhalf the discount, or one thousand pounds, which they could try to offset with a higher basic price. There is also the point that some buyers can find bargains elsewhere at least equal to the total discount, so why would their behaviour be affected?

Most of the cars we buy are imported, perhaps as many as 80%, so we would benefit other countries rather than giving a massive employment boost here, even allowing for the UK parts content of some imported cars.

It will probably help in Germany, who produce many more of their own cars. Here it is little more than a "do something, do anything" policy.