Scrappage scheme 'benefits foreign manufacturers'

Around £85m of the £100m spent so far by the Treasury on the scrappage scheme for new cars has turned into a taxpayers' subsidy to foreign car companies with little production in the UK.

An analysis of the figures from the Society of Motor Manufacturers and Traders reveals that some of the largest winners from the scheme have no manufacturing facilities in the UK and buy virtually no components here.

The South Korean-based Hyundai group, which includes Kia, has received around £20m. Some of that will have benefited Hyundai/Kia dealers and UK staff, but none will have gone to the type of hi-tech manufacturing jobs that Lord Mandelson has argued are vital to Britain's economic future.

Other big winners include Peugeot Citroën (£10m), which shut its Coventry plant in 2006 with the loss of 2,300 jobs; Fiat (£5m); Renault (almost £3m); and Volkswagen Group (£10m). In contrast, struggling Jaguar Land Rover received just £141,000 on cars registered so far. About £1.5m has gone to Mini (1,556 cars registered).