Britain’s struggling car industry is confident it will get a boost from the Government when it unveils its annual Budget – with a controversial scrappage scheme expected to be top of the list of measures.

Trade organisation the Society of Motor Manufacturers and Traders (SMMT) chief executive Paul Everitt said he expected a package of measures to be announced in the Budget on April 22 on top of the recent pledge to guarantee up to £2.3?billion of loans to the industry.

“I am expecting something. I’ve been slogging my guts out, so yes, I think we as an industry deserve something,” Mr Everitt said. “We set out with a package of measures in mind – that’s what we want to get.”

The SMMT asked the Government last year to boost consumer demand for cars and help manufacturers, including the loan guarantees, with:

* A £2,000 incentive for drivers to scrap older cars and replace them with new, more efficient models;

* Better access to finance and credit to purchase vehicles;

* Wage subsidies for short time working.

The Government has said it is looking at the scrappage scheme, which is opposed by some environmental campaigners but which has been adopted elsewhere in Europe, and Mr Everitt said he thought Chancellor Alistair Darling was holding back a proposal for the Budget.

But he warned that further delays could permanently damage the future of Britain’s car industry.

“The longer we wait, you lose companies, people. If we can get through the next six to 12 months with the majority of our industrial capability intact, we have an optimistic future,” Mr Everitt said.

Britain’s car industry is broadly foreign-owned, but directly or indirectly employs around 850,000 workers, say the SMMT. Car sales have been plummeting worldwide since the middle of last year, with British sales down 30 per cent year on year in March.

Mr Everitt said that despite the dramatic falls seen in UK car sales since last September, he was sure there were still plenty of drivers out there who wanted new cars – if only they could afford them.

“We know there is unmet demand out there because we’ve seen from the finance companies an increase in the number of people who are refused credit – these are not people who are sub-prime,” he said.

And as demand continues to flounder, he said more manufacturers would follow Nissan and Jaguar Land Rover in applying for loans from the European Investment Bank to help protect UK plants in the downturn.

“I know a number of the vehicle manufacturers have made applications to the EIB, or will be in the next financial year.”

Mr Everitt said the package of measures being demanded by the SMMT should be enough to help all firms.

“The future of the industry is about retaining what we’ve got and strengthening its depth, so that more of what goes into the vehicles can be produced and designed here – that’s a reasonable and reachable aspiration,” Mr Everitt added.