The much awaited – and feared – budget was announced in Parliament today by the Chancellor. It contained very few surprises and confirmed what we already know – we are heavily overstretched and it will take years to pay back what we have borrowed as a country.
One piece of news that did make the headlines was the £2000 rebate against the purchase of a new British made car. All we have to do is send our old models (over 10 years old) to the scrap yard.
Of course, in theory, this is a good idea, as it helps the environment and gives a vital shot in the arm to our struggling motor manufacturing industry – what little there is left!
So far so good then. Let’s all rush out to the nearest showroom and purchase a new eco-friendly car and get shot of the dirty old gas guzzler. But wait…..that is when we run into the problem!
Most of us who drive ten year old cars do so because we cannot afford to have newer models. It is not an eccentricity in our genetic make-up but a necessity. The average price of a new car has to be at least £10,000 leaving an £8,000 shortfall.
The recession we are experiencing, has been exacerbated by the banks refusing to make loans and from people who have overstretched themselves by borrowing too much, when money was in plentiful supply.
There lies the dilemma. On the one hand, it is unlikely that we will be able to find the finance necessary for the car and on the other, if we get the loan, we are just adding to the unmanageable debts we already have.
Someone in the Treasury should have looked up the term Catch 22!