Tax boost for car sales rejected

THE LONDON MOTOR SHOW

RUSSELL HOTTEN

Ian Lang, President of the Board of Trade, yesterday disappointed the motor industry by rejecting calls for tax incentives to boost the sale of new cars.

Leading executives had asked the Government to introduce a so-called scrappage subsidy, to encourage motorists to trade in old cars for new ones, in next month's Budget. But Mr Lang, whose Motor Show press conference was abandoned in disarray after protests by anti-car demonstrators, said: "There is no intention to start a scrappage subsidy."

His comment is the clearest statement yet of the Government's position after the Society of Motor Manufacturers and Traders submitted proposals for a subsidy to the Chancellor last month. One car executive said yesterday: "If Mr Lang can't see the sense of a subsidy, then no one in the Government is going to push it through."

A scrappage tax in France has boosted sales by an estimated 240,000 and has also been successful in Spain. Ian McAllister, chairman of Ford UK, has been a strong supporter of a subsidy for scrapping cars aged 10 years or older, saying this week that it would improve the environment if more old cars were taken off the road.

The RAC estimates that the number of cars on the road that were more than 10 years old rose to 7.4 million last year from 4.9 million in 1986 because the recession had suppressed consumer demand. Richard Parham, managing director of Peugeot UK, has proposed a graded subsidy of between pounds 500 and pounds 800 depending on the size of new car bought.

Not everyone in the industry was concerned by Mr Mr Lang's comments. Charlie Golden, managing director of Vauxhall, believes a subsidy would be a short-term gimmick. And John Towers, chief executive of Rover, said: "If the industry sells on just one point of advantage - price - then we are wasting our time."

Meanwhile Alex Trotman, chairman and chief executive of Ford, warned of the threat posed by South Korean car manufacturers. With companies like Daewoo making significant inroads in Europe, Mr Trotman described the country as the new Japan.

He said that 100,000 cars were exported from South Korea to Europe last year, but the target was to reach 500,000 by the end of the decade. This new "hyper competition" would be "far tougher than anything anyone has experienced in the past, here in Britain, in the US, or wherever."

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee