Call for a UK ‘new car for old’ scheme

Germany is extending its successful "new car for old" scheme, which has spurred record sales.

Conservative Chancellor Angela Merkel has reached agreement with her coalition government's left-wing finance minister Peer Steinbrück to allocate tens of millions more euros to finance the scheme, which was brought in to boost flagging manufacturers such as VW.

Anyone with a car nine years old or more qualifies for 2500 (£2300) as long as they buy a new car. Some 1.5 billion was set aside for the scheme, which saw such huge demand that VW posted record small-car sales last month despite the recession.

There are similar schemes in France and Spain, and UK motoring groups are pressing Gordon Brown to follow the trend.

Paul Watters, head of public affairs for the AA, said: "There will be fewer new-registration plated cars on the road than for many years, and this will be a very visible example of how the credit crunch and hard economic times have slashed new car sales. We must give a boost to the sale of new cars which are cleaner and safer than the ones they replace."