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New measures announced to boost the UK car industry

Lord Mandelson outlines a package of government support for the UK car industry

Business Secretary Lord Mandelson announced plans of government support for the UK car industry potentially worth up to 2.3bn. The package includes a scheme to unlock 1.3bn of loans from Europe for car manufacturers and suppliers, he also added that the government would also guarantee up to £1bn of further loans.

The car industry has told the government that it faces an emergency, and unions have called for a £13billion package of aid. More jobs will be at risk in vehicle manufacturing unless the government eases access to credit and finance. Most car manufacturers have now been affected; Nissan made 1,200 redundancies and had a two week shutdown. Jaguar Landrover have 450 redundancies planned and a series of one day shutdowns and Honda have a four month shutdown between February and May.

Shadow business secretary Ken Clarke said the package seemed “pretty small beer” compared with stories that have appeared over the weekend”. He said “sales of cars in this country have dropped by half whilst the government dithers”

The government's plan has two aims: not just to keep the wheels of the car industry turning at a time of economic crisis, but also to direct carmakers towards producing more environment-friendly vehicles.

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