Government urged to extend car scrappage scheme

Mon Sep 28 2009 10:25:59

A business group has urged the Government to extend the car scrappage scheme or risk undermining industry's recovery from recession.

The Engineering Employers Federation (EEF) is warning that manufacturers could slide into a "double dip" recession without further help.

In a letter to the Chancellor, the EEF said the scheme had helped stem the decline in production in the motor industry and helped retain significant numbers of skilled workers.

But the EEF said it was "far from certain" that consumer demand for cars could be sustained without incentives to replace older vehicles.

Director of policy Steve Radley said: "The success of the scrappage scheme has been clear for all to see and has put a floor under manufacturing recession and helped retain skilled employees.

"However, it is by no means certain that this positive trend will continue in the near future with consumer confidence still fragile and unemployment still rising."

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