‘Scrappage’ scheme demanded by retailers for domestic appliances

As per the media reports, a 'scrappage' project is being sought by the retailers for domestic appliances like fridges.

It was forwarded by the British Retail Consortium (BRC) that a plan same as the "cash for bangers" scheme for the car trade would protect jobs, which will aid Britain to hit carbon emission targets by motivating people to switch to more energy-efficient white goods. Furthermore, it is also mulling for tax relief on energy efficient items.

The recession has led to fall in sales of big-ticket electrical items. In its latest year, a sum of £140 million was lost by DSG, the owner of Currys, the electrical goods chain, following a 9 percent fall in like-for-like sales.

"The Government is working against its own objectives when it sets targets for reducing carbon emissions while charging full VAT on the efficient products that will move us towards those targets ... Removing VAT and exploring the possibility of a scrappage scheme would do a lot to get old energy and water-squandering appliances out of people's homes," said Stephen Robertson, the director-general of the BRC.

According to the BRC, its idea would cost £507 million a year in forgone VAT, equivalent to two weeks of the bill for cutting VAT from 17.5 percent to 15 percent last year.

The work done by the Centre for Economic and Business Research, for the BRC, claims that removing VAT from the most energy-efficient goods would cut domestic emissions by 1 percent.

It should be noted that Britain has planned to cut its carbon emissions by 34 percent below 1990 levels by 2020.