Is the Government abandoning the car industry?

By Jonathan Walker on Dec 17, 08 05:56 PM in Politics

A distinct change of tone from the Government over whether it is willing to make a billion pounds or more available to carmakers such as Jaguar Land Rover.

Last week, treasury and business minister Ian Pearson (Lab Dudley South) was asked about talks between the business and the government about offering financial report.

While he wouldn't confirm talks had taken place, he said: "What I want to say clearly to the House is that the automotive sector is extremely important to the UK.

Peter Mandelson and I publicly had a meeting with a wide cross-section of the automotive manufacturers, suppliers and retailers on 27 November.

"We continue closely to engage with the sector, and I am determined that we do everything we sensibly can to help viable businesses during these exceptional times."

It sounded pretty positive.

In a debate in the car industry today, the tone seemed very different.

He said: "I want to stress that any government support needs to be regarded as exceptional.

"These are exceptional times and we are having to contemplate doing exceptional things.

"Loans from government need to be seen very much as a last resort.

"In the first instance we should be looking to companies and their parents to provide the funds that are required for the future.

"We should look to companies to restructure."

He made the comments in a debate in Westminster Hall - part of the House of Commons - where MPs warned that tens or hundreds of thousands of jobs could go across the country, if the car industry didn't receive help.

But apparently, the Treasury has had second thoughts about providing the cash.

We also had the latest unemployment figures today, which showed, as expected, that unemployment is already significantly up.

There are 121,455 people claiming Jobseekers Allowance in the West Midlands, up from 22,557 up on this time last year.

It means 3.7 per cent of the workforce is currently out of a job, some way above the UK average of 2.8 per cent.

The picture is much bleaker for men than women, with 5.3 per cent of men in the workforce on benefits.

In Birmingham alone, the number of claimants is up by 5,193 compared to last year, with 37,818 people now claiming Jobseekers Allowance.

Solihull, Dudley, Walsall, Sandwell, Coventry and Wolverhampton have all seen the number of official "jobseekers" increase by more than 1,000 over 12 months.

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Chief Enterprises | America's provider of Bosch Relays, Solenoids, Connectors, and Diodes said:

Is that a true news? I don't think the government is closing the car industry. If they closed it, many private concerns will start their concern and it will give big problem to the government. May be it is true.

Chief Enterprises | America's provider of Bosch Relays, Solenoids, Connectors, and Diodes

January 15, 2009 5:39 PM

Jonathan Walker said:

I don't suggest they are closing the car industry - simply having second thoughts about whether to lend it public money, or use public money to guarantee bank loans.

Ministers have sent mixed messages over the past three months or so, but it's looking increasingly as if they have decided they do need to help Jaguar Land Rover. Lord Mandelson this week suggested the question was how exactly to support it and where finance was needed, rather than whether to give support or not.

January 15, 2009 6:26 PM