U.S. Congress: Take Note of U.K.'s Sputtering Scrappage Plan
May 19, 2009
Listen up, members of the U.S. Congress. As you write Cash for Clunkers legislation, take a
lesson from the Brits and keep it simple.
The car scrappage scheme that took effect in the United Kingdom Monday and championed by Prime Minister Gordon Brown sputtered at the starting line Monday.
Dealership and auto execs as well as consumers were flummoxed about how the new program works, prompting several major automakers to delay their involvement, causing Brown embarrassment and giving his opponents fresh fodder for criticism.
"The hiccups are an embarrassment for Mr. Brown, who on Monday visited a London car dealership with Lord Mandelson, the business secretary, to launch the 300 million pound plan," the Financial Times reported.
The glitches involved tax and other administrative issues, the paper reported. They were enough for General Motors, Ford and Honda to stand down on delivering new cars to buyers pending clarity from ministers on important details about how the trade-in scheme would be implemented before they delivered new cars to buyers.
The U.K.'s so-called Bangers for Cash program was an attempt to kick-start sales as well as boost fuel economy and reduce emissions of the country's fleet by offering 2,000 pounds in trade-in on cars at least 10 years old.
Despite the first-day glitches, the U.K. government and auto industry are optimistic the problems will be ironed out and the effort will boost car sales, which are off 25 percent from last year.
Lesson To Be Learned
Edmunds.com has argued that U.S. legislation that tries to address stimulation of sales in addition to the environment is resulting in a overly complicated law that satisfies no one -- not the auto industry, environmentalists nor consumers.
Instead, Congress should focus simply on stimulating car sales and address the trade-in of older vehicles for environmental reasons separately.
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