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Scrappage scheme extension urged

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A leading business group has urged the Government to extend the Car Scrappage Scheme and further help the vehicle industry's fight against the recession.

The Engineering Employers Federation (EEF) said the programme had helped save jobs and stem a decline in production, but warned that the industry could slide into a "double dip" recession without further help from the Government.

In a letter to the Chancellor, the EEF stated it was "far from certain" that consumer demand for cars could be sustained without incentives to replace older vehicles.

Director of policy Steve Radley said: "Failure to extend the scheme before a stronger recovery is in place runs the risk of pulling the rug from under the automotive sector, damaging key supply chains and prospects for a better balanced economy in the upturn."

The call follows similar pleas from The Society of Motor Manufacturers and Traders, who have claimed that the scheme, which allows new car buyers to receive a £2,000 discount when scrapping a vehicle that is more than 10 years old, could run out as early as next month.

© Press Association 2009