As soon as the UK's scrappage scheme was announced with the intent to help alarm bells began to ring in my head. It didn't suprise me that politicians didn't get it as they never do but there was support from academics too who are evidently as dangerous as anyone.
The most valuable lesson I learned in understanding politics was to never judge a government policy by its intentions and to only judge it by its results. No matter where you are on the political spectrum this rule is invaluable yet completely ignored by almost all.
The offer was only available to cars typically worth £250 to £1000 which is what the poorest could only drive. Of course they do not have enough money to buy a new car to take advantage of the scheme. As they would come to change their car they would find artificially high prices for cars usually affordable to them.
In any economic disaster by definition it's the poorest that truly suffer most and they certainly don't need it made any harder.
Was the scrappage scheme was inacted to help the poorest or to simply appease middle-England?
2 comments:
The scrappage scheme main aim was to stimulate the car industry which really was suffering due to the recession. This is an industry which employ 850,000 people in the U.K and between April 2008 and April 2009 production in the U.K dropped by over 50%. The scrappage scheme has help the industry and people keep thier jobs.
Austria, France, Germany, Italy and Luxembourg all introduced the scheme before the U.K so the car industry who were pushing the U.K to adopt a similar scheme had proof that such a scheme would help car sales, therefore keep production up.
It is however a one off scheme and when the money runs out then it's over(estimated to be next month. So these high second hand car prices should only last as long as the scheme and could be a small price to pay to safe guard the amount of jobs that were under threat.
"This is an industry which employ 850,000 people in the U.K and between April 2008 and April 2009 production in the U.K dropped by over 50%."
I'm pretty sure I can find another 850,000 of people who worked in industries which experienced rapid revenue drops. My own area of work has been seriously affected by around similar sales drops.
"Austria, France, Germany, Italy and Luxembourg all introduced the scheme before the U.K so the car industry who were pushing the U.K to adopt a similar scheme had proof that such a scheme would help car sales, therefore keep production up."
I don't doubt for a second the evidence that new car sales have gone up but its the way they've gone about it.
"The scrappage scheme has help the industry and people keep their jobs."
At what expense? It still hit the poorest the hardest.
"It is however a one off scheme and when the money runs out then it's over(estimated to be next month."
Thank god for that.
"So these high second hand car prices should only last as long as the scheme and could be a small price to pay to safe guard the amount of jobs that were under threat."
It could also be a huge price to pay.
When economic times are tough you don't want to be destroying masses of valuable functioning assets.
I would not be so critical of any other kind of help (tax breaks, loans, etc.).
We could have offered catapults to children as a swap for destroying their toys to go around smashing windows to get the window market going again.
Sorry, it's just too backwards to go around breaking things to get people to buy new ones.
Times are tough but any other way please.
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