Car Scappage - How to waste public money quickly
Our members ask us to point out whenever government or other organisations are pretending to be environmental when the truth is otherwise. Well, this scheme is not just greenwash, it is hogwash.
The Chancellor offers you three hundred million pounds to slow climate change – would you spend it on giving people 2,000 pounds to buy a new car? Of course not. That money would be better spent on other projects like roof insulation.
40% of climate change gases in this country are produced in homes and offices – twice as much as from cars.
From a climate perspective, this is money poured down the drain
If the three hundred million pounds had to be spent on transport, then it would be far better used to build safe cycle routes across the country. That would produce a dramatic improvement on our effect on climate change.
If the three hundred million pounds had to be spent on motoring alone, then it would be much better to invest in training people to drive safer, use less petrol and produce less carbon dioxide. You can get a massive media campaign for that sort of money. Helping people to save money and help save the environment too. Saving up to a quarter of money spent and carbon produced.
About the last idea you would have would be to pay people to buy new cars – it simple does not stack up as an environmental project.
Even in straight business terms giving people 2,000 pounds to buy new cars is a waste of our money. First, car sales are down 30% so 70% of cars are still being bought. So around a million people could be given 2,000 pounds to buy a car that they were going to buy this year anyway. What a waste.
Some people, who plan to buy a car next year, would buy one this year instead. That reduces car sales next year.
Robbing the future to pay for today
And what cars will people buy under this scheme? Apart from the Nissan Micra and the BMW mini we do not make small cars. So 95% per cent of these three hundred million pounds will go to importing cars from abroad. Making our balance of payments worse and the pound against the euro and the dollar will be worth even less.
So who does it help? It will help the new car showrooms but why does the government want to help the car retail trade when it did not help other retailers like Woolworths? It does not make sense.
This scrappage scheme is a way of buying votes for the next election under the pretext of the environment.
This is not prudence, this is prostitution.
Further details about the scrappage scheme
Previous article: Let's have a maximum speed limit of 20mph (Wednesday, 15th April, 2009)
Comments
Scrappage
I'm not sure why it is thought that the scrappage scheme is going to use so much public money. I am buying a small, cheap car under the scrappage scheme. The Government is giving me £1000 towards the cost, but I am paying £1020 in VAT to the Government on the sale. By my calculation the Govertnment is making a £20 profit on the deal! Those buying more expensive cars will pay even more in VAT. I believe there is a £55 first registration fee as well. It seems like a money spiner for the Government rather than a waste of taxpayers money!
Scrappage a VAT winner?
You are correct. VAT is a factor but not as large a factor as you might think. A couple of comments.
As its name implies VAT is a valued added tax. If the car has already been made then the manufacturer has already paid VAT on the parts. As most cars are simply assembled here and most of the value is in the parts most of the VAT has already been collected by the government.
Given that, from experience with previous scrappage schemes, we know (or could reasonably assume) that most purchases of new cars are undertaken by people who would be buying in the near future anyway, the government is gaining a marginal amount of VAT now but forgoing it, say, next year when the person would have bought the car anyway. Indeed the issue is further complicated by the fact that currently VAT is set at 15% but next year VAT could be set back to 17.5% or even raised higher to 20%. Given current low interest rates, it might be said that it is the government’s financial advantage to wait for the purchase next year.
Scrappage
It certainly isn't green, but that's hardly surprising, this gang of self-helpers [they help themselves to anything going] don't even understand green. What will happen is that people planning to buy a new car will get a banger first for a few quid [which would have been scrapped soon anyway], get their £200 discount and sneer at those who can't afford to buy a new car so have to continue using an old banger. Net gain to the fight against climate change, nil.
A real gain would be to give half this sum for people to convert their cars to run on LPG, that would be green.
Muddle Dup...
I believe you have muddled efforts to slow carbon emissions, with efforts to reduce the impact of the current slump. As you well know, offers, by any government, of subsidies for auto-industry products are ALL ABOUT propping up the economic power base and nothing to do with environment projects, or CO2, or joined-up-eco-socio-sustainable-whatever-we'd-do-if-we-didn't-have-sixty-million-people-to-control. So stop pretending that they've (we've) made a terrible mistake!
Not being dupped
Clearly you have not been dupped by this proposal but many people have. Over the past few days I have been in a number of radio talk shows and callers genuinely thought these proposals, as trailed, were green. This article is for them.
Cycle tracks
That's about 3,000 miles of new off road cycle track, lots more distance for mixed on/off road routes.
Or 3,000 new low emission British built buses to replace old more polluting stock
or any number of initiatives to stimulate the green economy, rather than enticing people to put more of there money into a new car which they will then feel obliged to use given their financial stake in it!
Scrapping perfectly good cars
Ans the most horrible thing is that most cars at 10 years old are perfectly clean and good to drive for another five or so years. Scrapping them now is another cycle of useless waste.