The scrappage scheme which could be announced next month, is a move by the government to kick start the car industry which has been battered by coronavirus. Registrations of new cars plummeted 97% in April and 89% last month – the lowest levels since the Second World War.

According to the report in The Telegraph, Boris Johnson is understood to have pencilled in 6 July for a major speech to relaunch the UK economy, with chancellor Rishi Sunak expected to give a statement afterwards.

The scrappage scheme would be similar to one brought in following the financial crash where drivers were given a £2,000 discount on a new car when scrapping their existing model.

‘Game-changing boost the automotive sector needs’

RAC head of roads policy, Nicholas Lyes, said: “Incentivising the take-up of cleaner vehicle technology might be the game-changing boost the automotive sector needs. Drivers’ concerns about emissions are becoming ever stronger and interest in zero-emission vehicles is increasing.

“But many continue to say that the upfront cost of electric vehicles compared to those of similarly sized conventional vehicles is a barrier to them switching so any sort of scheme which tackles this would be very welcome.

“With more public charging points becoming available and the government looking at clearer pricing for consumers, concerns about range anxiety and ease of charging are likely to decline.

“Clearly, there would need to be some consideration as to how this would work with the existing plug-in car grant scheme.”