December 2008 Car News - GBCarLoans.com

23rd December 2008

Mandelson plays down Jaguar deal

Lord Mandelson has not ruled out support for 'vital' manufacturers, however he has quashed hopes of a fast intervention to help Jaguar Land Rover.

The car maker has asked the government for financial support, unions say the industry needs aid "within days". Labour's Lord Bhattacharyya had suggested ministers were discussing a £667m loan package for Jaguar but he told the Observer the state would act only as a "lender of last resort". The firm's owner, India's Tata group, must "look to their own resources. The government cannot be the first call for help in these circumstances," Lord Mandelson insisted.

"If there is anything the government can appropriately do for any such company, then they will have to meet - and pass - some pretty tough tests," he added. Lord Mandelson told the Observer he was not indifferent to the plight of the car industry and that his belief was that the government may need to help companies vital to UK employment.

Prime Minister Gordon Brown has said there is "no promise of support" for Jaguar Land Rover, which has 15,000 UK employees. Shadow foreign secretary William Hague said the Tories would introduce a national loan guarantee scheme to help car manufacturers like Jaguar Land Rover but he said the government must not be seen to be "picking winners" and deciding which companies are going to succeed.

"What businesses across the country - not just the car industry - need is our national loan guarantee scheme." said Hague.

Former Labour leader Lord Kinnock's opinion on this subject was that Mr Hague had not addressed the particular case of Jaguar Land Rover, which needed short-term support with a repayable investment.

The Confederation of British Industry has said government loans are urgently needed to secure 800,000 UK jobs in the car-making industry.

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