The 'bangers and cash' scheme descended into chaos hours after its launch yesterday as Ford and Honda halted deliveries.Originally Posted by Perdita
The Government has attempted to kickstart the ailing motor industry by introducing a "cash for bangers" car-scrappage scheme.
Anyone with a car registered before 31 st December 1999 will get a cash incentive of £2,000 to trade in their old vehicle for a brand new one.
A total of £1,000 will come from the Government and the remaining £1,000 from car companies, with participants being able to buy any new vehicle, including small vans up to 3.5 tonnes, rather than just low-pollution models as had previously been suggested.
About £300 million has been put aside by the Government to fund the scheme, which is expected to come into effect as early as mid-May (18 May 09) and will last until March 2010 or when the money runs out, thus enabling 300,000 consumers to benefit.
The car being scrapped must be registered with the DVLA to a UK-domiciled registered keeper making the application. The vehicle must have a current MOT certificate and have been continuously registered to the current keeper for at least 12 months immediately before the application.
Dealers of participating manufacturers will do all the paperwork and arrange for the vehicle to be scrapped.
The new car must be of UK specification, registered after the UK car scrappage scheme has been implemented and it must be first registered to the same registered keeper as the old car.
Does not state anywhere that the car must be faultless
The top-selling manufacturers refused to register any new cars under the scheme after a row broke out over who should pay VAT on the vehicles.
It means thousands of motorists will not receive the vehicles they have been promised under the Government initiative until the problems have been sorted out.
Under the scheme, unveiled by Alistair Darling in last month's Budget in an attempt to kickstart the ailing motor industry, the owners of cars and small vans more than ten years old will get £2,000 off the price of a new vehicle when scrapping their old motor.
Half the cash is provided by the taxpayer and the rest by the manufacturer.
But the Daily Mail revealed on Saturday that the initiative had already hit problems because of a blunder over paperwork.
Car makers said it would be impossible to deliver the vehicles on time because they had not been given details on how to register the cars correctly or who should scrap the old cars.
They also said it was unclear whether dealers should share the cost of the discount and VAT on the price of new vehicles.
The embarrassing setback came after Gordon Brown and Business Secretary Lord Mandelson claimed the scheme would be 'very popular' as they launched it at a Nissan dealership in North London.
'We expect about 300,000 people to take it up,' Mr Brown said. 'It's also going to be a great help to the British car industry and it is part of our programme of getting the economy moving forward.'
However, within hours it emerged there were major disagreements between car makers, the Department for Business and HM Customs and Revenue.
Ford said ' administrative issues' needed to be resolved, while Honda said its dealers had been told not to register any cars until there had been clarity on 'a number' of issues.
AA president Edmund King said it was ludicrous the hitches had not been sorted out before the launch but it still fully supported the scheme.
Last night, the Department for Business said the Government had contracts with the manufacturers, who were responsible for paying half the £2,000 discount, as well as VAT of 15 per cent, which should be added to the price of a new car before the reduction was made.
It said the problem was that some manufacturers were still trying to resolve issues with dealers after asking them to share the costs.
No wonder the country is in the mess it is in if the government can't even get these issues sorted before commencing this scheme. Probably too busy thinking up ways of conning the taxpayers into paying more private bills for MPs
![Kirsty :]'s Avatar](image.php?u=8855&dateline=1216852519)
