Scrappage scheme gaining support

Motorists could be encouraged to buy new cars as part of new plans by the Government to help revive the struggling motor industry.

With many are avoiding replacing their old vehicles due to the recession, ministers appear to be considering incentives to get drivers to change their minds.

A voucher scheme could offer owners of vehicles that are more than nine years old, £2,000 towards new makes, with the £160 million a year costs could be shared with the industry.

In a bid to kick start trade in UK the motor industry, the Business Secretary Lord Mandelson is understood to want the measures included in the Budget on April 22.

Based on a similar and successful scheme in Germany, manufacturers claim that in this country it may create demand for up to 250,000 new cars.

Although there has been no confirmation as to whether the plan would feature in the Budget, Chancellor Alistair Darling is said to appreciate the "merit" in the proposal.

Different environmentalists debate the moves, as some say it is better to keep running old cars because of the mount of energy used in building new vehicles, whereas Friends of the Earth supported the idea and said it would promote more fuel-efficient models.

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