Scrap scheme extended

Business secretary Lord Mandelson has announced that the car scrappage scheme will be extended, with a further £100m added to the original £300m pot. It means an extra 100,000 cars will be available under a scheme that, as of 20th September, has seen 227,750 new cars sold.

The terms of the scheme remain the same, although the date of first registration for eligible cars now moves forward to 29th February 2000 (and 28th February 2002 for vans), which means that cars slightly less than ten years old qualify. There's no formal agreement in place with the manufacturers yet, though all are expected to sign up. Both Kia and Nissan, for example, were quick to voice their approval of the extension, and the National Franchised Dealers Association called it "a victory for common sense over dogma."

The move comes after industry trade body the SMMT lobbied the Government for an extension, fearing that the January VAT rise - which goes back up to 17.5 percent from 15 - will cause a sudden drop in demand. With the original pot set to run out well before the New Year, this extension should cushion the blow and see the steady sales rise continue for the time being.

However, not all are in favour. The Environmental Transport Association called the move "an expensive way to deal with climate change," with Director Andrew Davis claiming that "this is little more than a panicked way of propping up the industry as, given time, those cashing in the grants would most likely have bought the new car anyway."

Mark Nichol