THE UK car scrappage scheme, which has already directly created at least 250 jobs in the North-East, was last night hailed as the boost the industry needs after more than 60,000 new car orders were received in the past two months.

The scheme, announced in Chancellor Alistair Darling’s Budget in late April, offers a subsidy of £2,000 to owners of vehicles which are at least ten years old, to scrap them and replace them with new models before March next year.

The initiative was hailed by the Government as a means to stimulate the crisishit motor industry, with plants across the UK cutting jobs and enforcing shutdowns to help them weather the storm, including Nissan’s Sunderland plant, which cut 1,200 jobs in January.

However, in the past month, Nissan has re-employed 250 of the 400 temporary workers it made redundant as part of its cuts on fixed-term four-month contracts, a move said to have come as a direct result of meeting demand from the UK scrappage scheme and its equivalents in France, Germany and Italy.

The four schemes have already generated a combined 32,000 extra orders for the Sunderland factory. Further orders could see the fixedterm contracts it has given extended.

Last night, Business Secretary Lord Mandelson also hailed the scrappage scheme as a success, with the revelation that more than 60,000 orders have been placed since the scheme was announced two months ago.

“These figures speak for themselves. Car manufacturers continue to report on the success of the scheme with rising sales,” he said.

“It’s the boost that the industry needs.”

Although figures for new car sales last month show a 24.8 per cent year-on-year drop to 134,858, the Government said that orders taken as a result of the scrappage initiative will begin to show tangible results in the coming months.

The sales figures gave a further boost to Nissan, with its Sunderland-built Qashqai model being among the ten most popular UK cars for the month, with 2,629 sold during May – a 73 per cent yearon- year increase for the model.

The high levels of uptake appear to show the scrappage scheme has overcome initial problems, which saw it thrown into turmoil following a row over tax and costs that prompted leading manufacturers, including Ford and Honda, to refuse to take part.