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Monday 29 November 2010

Plug-in Car Grant

In the 2009 budget, the then-chancellor Alistair Darling announced that like Germany, France and Italy, the government of the UK was to introduce a car scrappage scheme. Under this scheme, if you owned a car which was 10 or more years old (and you had owned it for at least 12 months), the government would put £1,000 towards the cost of a new car on the condition that your old one was scrapped. This done in the hope of boosting the economy. The scheme was essentially government-subsidising of car-dependency with dubious economic benefits (unlike Germany, France and Italy, the UK is not a major manufacturer of motor vehicles).

The worst part of the scheme was the fact that the government could have used this initiative to give people a nudge in the right direction when it comes to their transport choices. Imagine if instead of subsiding the purchase of a new car (which was likely manufactured elsewhere), the government gave those scrapping an old car a rail season ticket between their home and a place of work for a year or two, or if the scheme had allowed the money to be used for a bicycle and accessories, or even if it had just given those scrapping the car some money on the agreement that they do not buy another car for specific number of years.

The environmental benefits of any of these schemes would have been clearer than they were with the car-scrappage scheme. The environmental cost of manufacturing a new car and shipping it is greater than any benefit of increased fuel efficiency of the newer model. The scrappage scheme also caused social problems as these new cars were generally driven more than the cars they replaced. Economically speaking, with comparatively few cars being made here in the UK, the benefit to the UK economy would have been fairly minimal. There is also added downside of the fact that several car manufacturers may have been saved from going bust; whilst I am obviously not pro job-loss, it would have been better for the government to put money into creating new jobs requiring similar skills such as train, bus or bike manufacturing, rather than keeping car manufacturing capacity at its current level.

The government is now subsidising the purchase of electric cars, which at present come with all the downsides of petrol-fuelled cars, most of which stem from each individual person using a 5/7-person vehicle to travel everywhere alone. The government is throwing £5,000 away per new car, subsidising those wealthy enough to afford an electric car at the same time as allowing massive increases in public transport fares, scrapping Cycling England and generally reducing funding available for cycling projects. Electric cars are not the future (at least not in towns and cities), there are plenty of places which government money could provide society with a much greater benefit; particularly cycling and rail projects.


  1. Another reason to ask (all together noooow!!!), "What war Mr.Hammond???"

    How an electric car can be called 'green' when it's battery will be anything but is beyond me...

    ...and then there's the congestion issue that it doesn't solve.

  2. Sadly it isn't going to get better.

    That £8Bn investment in rail announced last week?

    It's basically a cut achieved by changing the scope of various procurement projects.

    See more at

  3. the problem is that the Government (as much as France, Germany and Italy) is heavily dependent on 'supporters'... and the 'supporters' with the biggest wallets have all their fingers in too many [car] pies. I don't know how many hundreds (millions?!) of pounds Peel Holdings spent on their campaign opposing the Greater Manchester congestion charge...

    It also doesn't help the fact that people sees owning a shiny new car as the holy grail... now, if the holy grail was a bike, or a rail network that was reaaaally value for money... well, then... we could open a bottle of bubbly ;)

  4. I think the bike/rail combination is pretty ideal really. Rail is great for travelling between relatively distant hubs very quickly. It is efficient and safe. It could be cheap, but the government is more interested in subsidising car usage. This can be seen by the way that money spent on motorways is referred to as "investment" whilst money spent on railways is referred to as "subsidy."

    Bikes are a great way for everyone to get around the urban jungle (and plenty more enjoy going further afield), which makes them an ideal partner for trains. A modernised, fast and electrified rail network (with controls on pricing) coupled with Dutch-style cycle infrastructure could together be the solution to many of the problems facing the UK.


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