Car scrapping scheme

I have just been reading an outline of how it will work. What a brilliant idea!

The government are organising a £2,000 subsidy to the few people who have owned a car for more than a year and want to scrap it in favour of a brand new car. When I say organising, it will only cost the government £1,000 - the rest comes from the manufacturer (actually it is less than this because he gets some VAT relief).

What is really clever is the tax rules though. If you are in business and it is a business vehicle you are selling, then the £2,000 is NOT sale proceeds. The car is scrapped, so you get nothing for it. Instead the £2,000 is a discount off the price of the new car.

With the new capital allowance rules, this could mean that if you are going for a really green car, the 100% allowances you get will be on the lower value (the price of the new car less £2,000). And the new "pooling" rules for cars means that you do not get the balance of any relief when you sell the old one - you only get a writing down allowance on the balance so that it will take about 10 years to get 90% of the the balance.

Did Gordon come up with this, or is this one of the reasons Alistair has kept his job at number 11?