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Mandelson hints at scrappage scheme U-turn

Date: 09 February 2009

Lord Mandelson is considering implementing a scheme that would see motorists getting financial incentives for trading in their old cars, according to the Financial Times.

The business secretary told the CBI's annual manufacturing dinner that he is "looking at other countries' experience with scrappage schemes".

In a radio interview at the end of January, Mandelson dismissed a scrappage scheme in Germany as a failure, saying it was "not showing great signs of success".

The latest development will come as good news to the car industry, which is lobbying the Government to consider such a scheme.

The BVRLA wrote to Lord Mandelson about the matter recently. The organisation's chief executive Jon Lewis said: We believe that there are compelling reasons for a car scrappage scheme to be made available to buyers, whether they are purchasing new vehicles or fuel-efficient second-hand ones."

German media has reported that 400,000 enquiries have already been received into the country's system that offers ?2500 to anyone trading in a car over nine years old for a new one.