VW launches new UK diesel scrappage scheme

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Volkswagen UK is offering customers discounts of up to £6,000 to trade in diesel vehicles when buying a new car.

All the Volkswagen UK brands – including Audi, Seat, Skoda and Volkswagen Commercial Vehicles – will participate. VW launched a more generous scheme in Germany in August in the wake of its diesel emissions scandal. Competitors in the UK, including BMW, Ford, Hyundai, Mercedes-Benz and Vauxhall have already launched schemes.

Rival Toyota also launched a scrappage scheme on Friday, offering up to £4,000 off a new Toyota. VW’s UK scheme is a continuation of the initiative launched in Germany, which was brought in after a top level summit between politicians and the country’s leading carmakers, including BMW, Daimler and Opel.

VW’s German scheme offered a discount of up to 10,000 euros (£9,000) to trade in diesel vehicles Diesel cars have been under scrutiny over high levels of nitrogen oxide emissions, sparked by VW’s diesel scandal. Two years ago it was revealed that Volkswagen had cheated emissions tests, affecting 11 million vehicles worldwide. Car manufacturers have been under increasing political pressure, especially in Germany, to encourage consumers to buy less polluting cars.

UK trade-ins

VW’s UK scheme will apply to any diesel vehicle that has emissions standards lower than Euro 5 and was registered before 2010. Incentives range from £1,800 off a new VW Up! to £6,000 off a Sharan people carrier. Electric and hybrid vehicles, which attract government grants, will be included in the scheme. So, for example, an e-Golf, which gets a £4,500 grant from the government, will also have VW trade-in saving of £5,500, adding up to £10,000 off in total.

Tim Urquhart, principal analyst at IHS Automotive, said the move was both about restoring VW’s credibility after “Dieselgate” and boosting sales. “We’ve seen a bit of a drop in the UK car market this year after years of really accelerated growth. I think the manufacturers are looking to get people into their showrooms,” he told the BBC’s Today programme. “At the same time VW are showing they are being socially responsible. They are getting some of these older diesel vehicles off the roads.”

Positive publicity

Jim Holder, editorial director of Haymarket Automotive, told the BBC that VW’s scrappage incentives would vary from country to country, due to factors such as transport costs and vehicles being cheaper in its home market. However, he said VW would probably have pitched their discounts in order to compete with rival schemes in the UK market. VW’s UK scheme offers substantially higher discounts than some of its competitors, which seem to hover around the £2,000 mark as an upper limit. However, Mr Holder added that it was not clear what impact the VW scheme would have on vehicle sales. “Owners of older vehicles typically don’t have the money to spend on a new vehicle, even with these discounts – in normal circumstances it would be far more likely that they would trade up to another, less old, used car. “However, there are some potentially good savings here, and the positive publicity could stir interest at a time when registrations are down across the market,” he said.

‘Win-win solution’

Toyota’s scheme runs from 1 September to 31 December and is open to any vehicle more than seven years old. Customers can get a discount of £2,000 off models including Aygo, Prius and Hilux, and £4,000 off a Land Cruiser. Paul Van der Burgh, Toyota GB managing director, said: “Our scrappage scheme is a win-win solution. Motorists can dispose of their older vehicles and have access to our cleaner, more efficient model range.”


Currency rates hit new low at airport bureaux de change

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Travellers buying their currencies at UK airports are being offered as little as 86 euro cents to the pound.

Foreign exchange broker FairFx, which carried out a survey for the BBC, said this rate, from Moneycorp at Southampton airport, was the worst at any airport bureau de change.

The average euro rate across 16 big UK airports was higher, at 95 euro cents to the pound.

Ten months ago the average at these outlets stood at 99 euro cents. James Hickman, chief commercial officer at FairFX, said the fact that airport rates are so low – much worse even than at High Street banks – shows that the bureaux de change firms are taking advantage.

“In reality they are ripping off the customer, who is effectively captive as they have nowhere else to buy their money at an airport,” he said.

“At most airports and terminals individual companies have a monopoly.

“They should be regulated as there is simply no justification for charging someone 14% [the average margin between the tourist and money market rates] to change their pounds to euros,” he added. That margin is as high as 26% at Moneycorp’s Southampton airport outlet.

Pauline Maguire, Moneycorp’s retail director, said: “The reason for our higher airport rates is the significant cost associated with operating there – from ground rent and additional security, to the cost of staffing the bureaux for customers on early and late flights.”

“An easy and more cost-effective way for customers to buy travel money is to pre-order online and collect at the airport,” she said.

The best euro rate for tourists detected in the airport survey was 1.05 euros, from Travelex at Newcastle airport.

Wide variation

The average tourist rate for the pound against the US dollar is also very low.

Currently the average is $1.12 to the pound at UK airports, ranging from $1.05 at ICE at Norwich airport to $1.15 from Travelex at Heathrow Terminal 3.

Koko Sarkari, chief executive of ICE, which runs bureaux de change at Belfast, Birmingham, Heathrow and Luton airports, dismissed the idea his firm was exploiting a captive market.

“We work hard to keep our prices fair and competitive around the world,” he said.

“However, due to differences in distribution, costs of operation, regional competition and other factors such as ongoing volatility in the market, as we are experiencing now, online prices may not be the same as our ICE branch prices and prices may also vary between branches because of these factors.”

‘Brexit uncertainty’

One reason for the poor rates on offer to tourists is the continued decline of the pound on the foreign exchange markets, in the wake of last year’s Brexit vote.

The pound’s money market rate – the one at which banks buy and sell to each other – has dropped from $1.31 to $1.29 in the past 12 months.

Against the euro it has dropped much more in that time, from 1.18 euro to 1.08 euro.

Continuing Brexit uncertainty is feeding into sterling weakness, said Simon Derrick, a managing director at BNY Mellon.

Traders are looking to see what will happen over the next two months, with the attempted incorporation of EU law into UK legislation through the Great Repeal Bill, and EU negotiator Michel Barnier reporting back to the European Parliament on Brexit talks.

Sterling also hasn’t done that well in August after the Bank of England monetary policy committee voted to keep rates on hold – investors see no prospect of a rates rise any time soon, he said.

However, there are two sides to the story. The euro is also getting stronger because “the eurozone economy is really starting to show some signs of life,” he said.

Eurozone consumer confidence seems to be picking up, and investors think the ECB will start to tighten monetary policy as inflationary pressures build.


NHS ‘leaking millions’ in PFI contracts

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The NHS is “leaking” money to private companies in contracts to build and run hospitals, a report says.

Under the Private Finance Initiative (PFI), companies provide money for new hospitals and then charge annual fees.

The Centre for Health and the Public Interest (CHPI) publication – based on 107 PFI contracts in England – said such companies had made pre-tax profits of £831m in the past six years.

The Department of Health said less than 3% of the NHS budget was spent on PFI.

PFI has always provoked vigorous debate about whether the benefit is worth the long-term cost.

The CHPI argues the money made by private companies could have been spent on patients.

Colin Leys, one of the chairmen of the CHPI, said: “This report shows for the first time the huge amount of taxpayers’ money which is leaking out of the NHS through the profits generated by PFI companies.

“Given the extreme austerity in the NHS, where patients are being denied treatment and waiting times for operations are rising, the government needs to take action to stop this leakage of taxpayer funds out of the NHS.”

The CHPI is calling for:

  • Caps on the amount of profit that can be made from PFI contracts
  • Taxing PFI companies to recoup costs
  • Either renegotiating PFI contracts or using government loans to “buy out” companies

A Department of Health spokeswoman said: “The NHS is recognised by the independent Commonwealth Fund as the most efficient healthcare system in the world and currently spends less than 3% of its annual budget on PFI.

“The first PFI contracts for NHS hospitals, which were signed in 1997, range between 25 and 30 years.

“This report analyses just six years of contracts and, as a result, does not represent the full picture.”


Virgin Holidays become first to abolish extra charges for single parents

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Virgin Holidays has become the first to abolish stealth hotel charges for single parent families to a string of long-haul destinations.

Traditionally, single mums or dads who book rooms abroad are forced to pay prices based on two adults sharing.

But from October 1st, single parent holidaymakers travelling with Virgin could save hundreds of pounds on trips to the Caribbean resorts.

The move could save families up to £1,000 and comes after it was revealed almost half of 500 single parents polled had no idea they are charged more for their holidays.

There are almost two million single parent families in Britain with figures show this number has increased by 15 per cent in the past 20 twenty years.

And 46 per cent of single parents admit the charge for two adults has led to them abandoning plans for a holiday altogether or looking at cheaper options closer to home.

Fifty-six per cent have even invited a friend or relative on holiday with them to get their money’s worth.

Virgin’s partnership with Elite Island Resorts Caribbean means single parents will avoid hefty room fees in ten Caribbean resorts, including hotels in Antigua, St Lucia and Barbados.

New pricing structure

The current pricing structure of long-haul holidays is usually based on two adults sharing one room, meaning a single parent travelling with one child would have to pay for two adults.

The new pricing structure from Virgin offers a reduction for the second occupant if they are a child. UK charity Gingerbread – which provides specialist advice, support and advocacy to single parents – welcomed the move and highlighted the important role companies needed to play in supporting parents across the country.

Rosie Ferguson, CEO of Gingerbread, said: “Families come in all shapes and sizes, and single parent families make up one in four families with children in the UK. “But we constantly hear from single parents who find themselves ‘priced out’ of family activities. “All too often we see tickets, deals and memberships that offer family discounts – but only for couple families. “That isn’t just frustrating for single parents; it’s also short-sighted of businesses, which are ignoring two million potential customers.”

The poll of single parents also found 84 per cent feel angry at the prospect of having to pay more because they are travelling alone with their offspring. But seven per cent say they find it harder to travel as a single parent family, with more than three quarters saying the cost can prove too much to fund alone. And almost eight in ten have had to make sacrifices to be able to afford a holiday with their children, including cutting back on luxuries for themselves, selling personal items and taking on a second job or overtime

 

 

 


Brexit: Keep single market for transition period – Labour

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Labour would keep the UK in the EU single market and customs union for a transitional period after leaving the EU, the party has said.

Shadow Brexit secretary Sir Keir Starmer set out Labour’s new position in the Observer.

The shift in policy would mean accepting the free movement of labour after leaving the EU in March 2019.

Sir Keir said the transition would be “as short as possible but as long as necessary”.

Meanwhile, Brexit Secretary David Davis urged the European Commission to have a flexible approach to talks.

Labour’s leadership has been criticised by opponents for a lack of clarity on what deal Britain should seek immediately after the EU.

Sir Keir said a transitional period was needed to avoid a “cliff edge” for the economy, so that goods and services could continue to flow between the EU and UK while complex negotiations on the permanent deal continued.

“Labour would seek a transitional deal that maintains the same basic terms that we currently enjoy with the EU,” he wrote.

“That means we would seek to remain in a customs union with the EU and within the single market during this period.

“It means we would abide by the common rules of both.”

‘Unlimited migration’

He compared this with the government’s preference for “bespoke” transitional arrangements, which he said were highly unlikely to be negotiated before March 2019.

He did not say how long the transitional period would be – only that it would be “as short as possible, but as long as is necessary”.

The customs union is the EU’s tariff-free trading area, while the single market also includes the free movement of goods, services, capital and people.

“Those who campaigned to leave the EU are likely to be concerned that this could see unlimited migration continue for some time after Brexit,” said the BBC’s political correspondent Iain Watson.

After the transitional period, Sir Keir said, the new relationship with the EU would “retain the benefits of the customs union and the single market”, but how that would be achieved “is secondary to the outcome”.

Remaining in a form of customs union with the EU was a “possible end destination” for Labour, he said, but that must be “subject to negotiations”.

“It also means that Labour is flexible as to whether the benefits of the single market are best retained by negotiating a new single market relationship or by working up from a bespoke trade deal.”

He said a final deal must address the “need for more effective management of migration”.

Party leader Jeremy Corbyn’s office confirmed that the proposals had been agreed with him and were official policy.

TUC general secretary Frances O’Grady said it was a “sensible and reasonable” approach to take, and would give working people “certainty” on their jobs and rights at work.

But Liberal Democrat Brexit spokesman Tom Brake said it was “all spin and no principle”.

‘Temporary customs union’

The government has also called for a transition period to help business adjust after Brexit.

But chancellor Philip Hammond and trade secretary Liam Fox said the UK would be “outside the single market and outside the customs union” during this period.

A paper subsequently published by the government said it could ask Brussels to establish a “temporary customs union” after March 2019.

But during this period, it would also expect to be able to negotiate its own international trade deals – something it cannot do as an EU customs union member.

Meanwhile, Brexit Secretary David Davis will meet the European Commission’s chief negotiator Michel Barnier on Monday to formally open Brexit discussions.

The government said this week’s negotiations were “likely to be technical in nature”, ahead of more substantial talks in September.

It said both sides must be “flexible and willing to compromise” when it comes to solving areas where they disagree.


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