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UK car industry to receive £2.3 billion support package

By Matt Brogan |

UK car manufacturers could be thrown a support package worth up to £2.3 billion under a plan outlined in British parliament yesterday.

Considered vital to British manufacturing, the car industry is seen as at very high risk in face of the economic downturn and that as many regional economies depend on such manufacturing for their survival, it was imperative that the government secured these loans.

But the finer detail of the loans are not without a catch. Perhaps taking the lead from US President Obama yesterday, the UK loans must be used to establish the foundations for a low-carbon future and manufacturers were thus implored to reinvent and develop more environmentally friendly technologies both in its vehicles and its manufacture, a move which drew praise from green groups.

It was also made clear that the loans were no to be seen as a blank cheque and that any such borrowings must provide schemes whereby jobs are retained and or created providing what they say is “value for money” from the loan.

“The car industry has to change and suceed in the new world,” said Lord Mandleson, Business Secretary (pictured above). “The industry is not a lame duck and this is no bail out.”

Responding to the announcement Shadow Business Secretary Ken Clarke referred to the package as a “pretty small beer” and went on to say that “I’m slightly disappointed. I thought the secretary of state who I am shadowing would produce some new ideas, some dynamite,” he said.

“Is it the case that the secretary of state has not produced a bail-out because the Treasury has finally won an argument inside the government and explained to him that they can’t afford the kind of support for the industry that was being trailed.” Clarke continued.

The government has been accused of dithering on the situation as a whole and it has been suggested that these loans could have been made available as early as October last year.

Car manufacturers have also united to say that although the package is welcomed they question as to whether the amount will be enough.

The finer details of the loan including distribution timing will be sorted in meetings between the Business Secretary an manufacturing bodies today.


 
  • FRUGAL_ONE

    *****PRIMO!*****

    This is a tricky one, no real *British* owned manufacturer exists [ok, the ones that build that black cab] so should the GovCo of the owners of these foreign companies be assisting with payments or the British GovCo.

    Regardless, they all should pay back the tax payers money when the times come good again

    Cheers

    F-0

  • MisterTwo

    Same as in Oz then, there isn’t a real “Australian” owned manufacturer in existence. And before everyone jumps up and down Holden and Ford is American, HSV is controlled by a Scot (Tom Walkinshaw) and FPV is majority owned by the English (51% Prodrive).

  • mazford

    Mister Two………that may be true but they are still important as they supply jobs for the local population. Imagine how many jobs and billions of dollars Ford has contributed to this country over the past 80 years, so they are known as local.

  • MisterTwo

    Mazford, my comment was in response to Frugal-One who stated that there wasn’t a “real” British manufacturer insinuating that Australia did have it’s own, which it doesn’t and this is what I was pointing out. The fact is that Ford, Vauxhall, Jaguar-Land Rover, Toyota, Nissan, Honda etc have also invested billions of pounds and thousands of jobs in the UK. So based on that logic are they local too?

  • Frontman

    Please note, in the same way as the rescue packages in the states are set up, these are loans. Available immediately, however they must be paid back! Kind of a huge HEX FEE loan that Aust Uni students can have, pay it back when you are earning money.

    Where as the Australian “RESCUE” package was 6.1bil but spread out over 13 years with a large slice of it requiring $3.00 input to recieve $1.00 govco money. Another large slice of the Australian Rescue Package Donated by K.Rudd was giving more money to the LPG rebate system and other systems not directly relating to the Automotive manufacturing comunity. This is why I laughed when so people went off at the so called bail outs. It is not money for nothing (like was given to Toyota in Australia to build the Hybrid & the money Alabama gave Mercedes Benz to set up a factory there or even the financial bail out packages). All of these Govco assitance packages have Shipping Hausers not strings attached.

  • Alex

    Fantastic. It doesn’t matter who owns them, it would be a sad day in motoring history if we lost Jaguar or Land Rover. I imagine Aston Martin may also get some of this and that would be a sadder loss again.

  • Spitfire

    At the end of the day when the world financial crisis is over there will still be to many car manufacturers and a massive oversupply of vehicles. What happens then?