As expected, U.K. Finance Minister Alistair Darling has officially announced a new vehicle scrappage program that will pay motorists £2,000 ($2,900 USD) for trading in a vehicle that's at least 10 years old for a new car. Half of the funds will be provided by the government, and the other half will be paid out by automakers.

There will be no regulations governing the required fuel efficiency or type of vehicle that will qualify for the subsidy, leading some to question the environmental benefits of the scheme. There are also questions as to where the £300 million ($435M USD) required to fund the program through March of 2010 will come from, as Darling has also announced that the U.K. budget will hit its largest deficit ever.

In addition to approving the car scrappage scheme, the government also officially approved an increase in the national fuel duty by 2p per liter.

[Source: Reuters | Image: Matt Cardy/Getty]

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