I'm more concerned about the effect it'll have on learner drivers, my first car was a 1.1 Fiesta for £300, so many learner cars got scrapped, what are people going to buy to learn to drive in in 5 years time?
You say that; but I think there are still plenty of basic, bottom-of-the-range sheds out there to be had cheaply.
A lot of people scrapped cars to buy new ones, but I think may people who are initially driving things at that end of the market were not able to afford a new car and stuck with what they had.
Another point is that many of the people who went in for this bought rubbish (Hyundi, Kia, Vauxhall, etc) so these cars will be worth very little in a short time.