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Bill Radke: The British government releases its 2009 budget later today. Now, there’s not much room for new spending, but here’s one idea: paying drivers to scrap their old cars for new ones. We hear more now from Christopher Werth.
Christopher Werth: The U.K. would join a growing rank of European countries offering car-scrapping subsidies. The British proposal would pay drivers nearly $3,000 to trade in their rust buckets for something fresh off the assembly line in order to combat dismal new car sales.
Germany’s scrappage scheme increased sales by 40 percent last month. Industry leaders say it¹s also good for the environment, as motorists upgrade to more fuel-efficient models.
But Franziska Achterberg of Greenpeace takes issue with those claims:
Franziska Achterberg: None of the schemes set a ceiling that guarantees that the car that you buy with a government subsidy actually has a better mileage than the car that you turn in. So you’re not sure to replace a bad car with a good car.
There¹s also concern the scheme would only help foreign carmakers. That may also hold up similar legislation in the U.S. Two “cash for clunker” bills in Congress could pay drivers up to $5,000, but they differ on whether to exclude automakers outside North America.
In London, I’m Christopher Werth for Marketplace.
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