Whip out the financial righteous indignation/mindless optimism, for today is Budget Day in the UK, and Alistair Darling has a whopper of an idea to administer some serious cardiovascular stimulation to the automotive industry. The government is prepared to pay up to £2,000 towards a new (or nearly new) car when motorists scrap a vehicle that is more than ten years old. Perhaps unsurprisingly, the idea is taken from the Germans and other EU nations, where similar schemes have resulted in new car sales jumping up to 40 per cent in the last month. Citroen dealerships in the UK have reportedly seen a rise in new car sales following their own implementation of such a system.

However, questions have been raised about the value of investing tax-payers’ money in such a scheme, since many of the additional new cars sold through it will have been imported, while the vehicles to be scrapped must prove their roadworthiness to qualify; only those in possession of an MOT certificate will be able to claim money off a new purchase. Of course, without this latter measure, it is easy to see a loophole developing, through which opportunists may profit by buying an old car with the sole intention of using it to claim money off a new purchase. While these concerns are worth addressing, it would take a hardened cynic to foresee no boost at all for new car sales in the UK as a result of these plans.