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Mandelson considers car trade scheme

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Anyone who thought the business secretary reminded them of a dark wizard from an Arabian tale will find it no surprise that he is now offering "new cars for old".

The scheme is being considered by Lord Mandelson will see old cars traded in for new, less-polluting models in a bid to stimulate the flagging car industry and help the environment.

The plan comes after figures showed new car sales saw the biggest monthly drop since 1974 - a slump of 30.9% last month compared with January 2008.

It is thought the "scrappage scheme", already operated by other countries in Europe, could increase sales while helping the Government hit targets for cutting greenhouse gases.

The announcement will also please hard-pressed motorists who have been forced to employ a number of tactics in recent months to keep cost down, including searching for cheaper car insurance and trading down to more economic vehicles.

But officials at Lord Mandelson's Department for Business, Enterprise and Regulatory Reform cautioned that no decision had yet been taken on whether to introduce scrappage in the UK, stating that they were yet to be convinced that it would provide value for money.

© Press Association 2009