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UK government to extend car scrappage scheme

The BBC has learnt that the UK government will this week announce a further extension of the popular car scrappage scheme which compensates motorists for scrapping their old uneconomical vehicles in favour of new eco-friendly models. While the scheme looks likely to be extended from the end of February to the end of March the government is unlikely to inject any more money over and above the £400 million already put aside.

It is estimated that 330,000 new cars have been acquired under the programme leaving an additional 70,000 to take this figure up to the 400,000 limit. So in effect the UK government is only extending the scheme to allow the remaining capacity of 70,000 vehicles to be taken up. Whether we see a similar extension at the end of March remains to be seen but the compensation scheme is proving extremely popular with motorists in the UK.

We may see the introduction of short-term incentives for UK voters in the run-up to the election although ultimately it will be issues such as the economy, tax and budget deficit which will be more prominent in voter's minds. However, any additional votes which an extension of the car scrappage scheme may attract would be welcomed by the government!

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