Simpson calls for German style "car scrapping scheme" to help car industry

On a visit to BMW in Oxford this week Derek Simpson, called on the government to introduce an "old banger bonus" scheme, similar to the successful German scheme as part of a comprehensive package to support the UK car industry.

The Autowrack Prämie (old banger bonus), introduced by the German Government as part of a £47bn stimulus package has proved to be an instant success. The scheme gives car owners £2,500 to trade in their old cars for new ones. The German government has put aside €1.5bn to finance the scheme – enough to buy 600,000 cars.

The UK government have committed to a £2.9billion package to support the car industry. However, Unite is urging the government to go much further. Unite is calling for £13 billion fund to be made available to provide interim relief for producers and to cover employment costs during the crisis period.This package could be used to support a similar scheme to the Germans but only as part of a wider, strategic and significant support package.

Derek Simpson said; "Car producers in the UK are hanging on by a thread because of a lack of credit from the banks and a dramatic fall-off in demand for cars. A scheme similar to the one introduced by the Germans would be a hugely popular way to boost car sales, but only as part of a wider, strategic and significant support package.

"The support that Lord Mandelson announced towards the end of January is a start. Underwriting loans from the European Investment Bank and making millions of pounds available to help with retraining for car industry workers during the downturn is to be welcomed but much more support will be needed.

"We now need to build on this initial phase of support. More has to be done to throw a lifeline to the car and components sector, and we need the sort of confidence-building measures that will stimulate demand for cars among the public. If no-one is buying cars, it makes it very difficult for a rescue package to work. "