Car scrappage deal 'confusing' Ford and Honda delay taking part in scheme to boost sales.

Byline: LIAM CHRISTOPHER

THE Gover nment's "cash for bangers" car scrappage scheme began amid confusion yesterday with top-selling company Ford among some manufacturers delaying taking part.

A lack of clarity over VAT payments and the role of dealers in the initiative led some companies, including Ford and Honda, not to register any new vehicles under the scheme.

Earlier, Prime Minister Gordon Brown and Business Secretary Lord Mandelson, visiting a Nissan dealership in north London, had hailed the scheme under which owners of cars and small vans more than 10 years old will get pounds 2,000 off the price of a brand-new vehicle when scrapping their old motor.

But within hours it emerged that the initiative, introduced to boost new car sales which have slumped for 11 successive months, had run into a glitch.

Ford said it was working to resolve "administrative issues" while Honda said its dealers had been told not to register any cars until there was clarity on a number of outstanding issues.

AA president Edmund King said it was "ludicrous" that hitches had not been sorted out, but the Business Department said it had been clear right from the start that the initiative was between the department and manufacturers, and that it was up to manufacturers themselves to sort out any problems with dealers.

The Department also made it clear that VAT of 15% is added to the price of a new car before the pounds 2,000reduction -with half the money coming from the Gover nment and the other half from manufacturers - is made.

A Ford spokesman said: "Ford has been part of negotiations between the Gover nment and all vehicle manufacturers on the vehicle scrappage scheme announced in last month's

Budget. As a significant employer and investor in the UK, Ford remains committed to this scheme to stimulate sales within the sector and help protect jobs.

"Based on details which have only become apparent late in these negotiations, Ford is working to resolve some outstanding administrative issues but is confident it can begin sales within a few days of the official start date.

"Detailed information on the scrappage scheme was not included in the Budget. However, Ford as leader of the UK vehicle market welcomed it on behalf of customers, industry employees and also for its safety and environmental benefits." A Business Department spokeswoman said: "On May 1, we issued legal contracts to manufacturers which set out the terms of the scheme and every major manufacturer has signed.

Thirty-eight manufacturers have signed contracts with the Department which set out clearly that manufacturers provide pounds 1,000 and the Gover nment matches it.

"However, some manufacturers have not yet agreed terms with their dealers and are asking their dealers to pay and share the costs of the manufacturer's pounds 1,000. We understand several dealers are unhappy about the idea they should share the costs."What do you think? Email us with your views at [e-mail], or write to us at the address on Page 10