THE region could reap the benefits of a scheme announced in the Budget that will mean motorists offered £2,000 towards a new car or van if they trade in their old vehicle for scrap.

The scheme, for vehicles aged ten years and over, is backed by £300m from the Government and is intended to provide immediate shortterm support for the car industry in the wake of falling sales.

The Government hopes it will also get older vehicles off the road and encourage drivers to invest in newer, safer and more environmentally friendly models.

Paul Williamson, a manufacturing partner at Deloitte, in Newcastle, said: “This could jump-start new car sales, which are at their lowest level for over a decade.

“It should also give automotive manufacturers greater confidence to increase production levels after the scaling back of production and reduction of working hours seen at plants right across the country.”

Sarah Green, regional director of the Confederation of British Industry, described the scheme as worthwhile and said the region should reap the benefits.

But Tony Cleaver, from Durham Business School, said the scheme may not be the benefit to UK industry that was thought.

He said: “Most of the cars produced in Britain are exported, and most of the cars consumed in Britain are imported, hence the importance of other countries stimulating their economies and not placing barriers to trade.

“If UK consumers increase their purchases of cars, thanks to the new trade-in subsidies, this will benefit European industry more than our own.”

Tim Porter, a tax partner at PricewaterhouseCoopers, in Newcastle, said Alistair Darling had announced a number of tax and incentive measures in his Budget designed to stimulate the economy, but could have gone further.

He said: “In addition, where economic growth will depend on businesses investing in the North-East, we are concerned that increases in income taxes will make the UK a less attractive location in which to base entrepreneurial business.”

Helen Goodman, the Labour MP for Bishop Auckland, welcomed moves that will allow the deferral of business rates and also a planned £500m of investment in building homes, and said: “Our area has been hit hard by the recession, and the Chancellor’s Budget is a Budget for jobs with targeted investment to ensure a stronger recovery.”