Business secretary Lord Mandelson has outlined a £2.3bn package of government support for the UK car industry to the House of Lords. The Labour peer is due to outline the rescue package to industry representatives today (January 28).
The package, unveiled to the Lords last night includes a scheme to make available £1.3bn of loans from Europe for car manufacturers and major suppliers.
Lord Mandelson says the government will also guarantee up to £1bn of further loans to fund investment in environmentally-friendlier vehicles, which met European Union targets for carbon dioxide emissions. He says: “This industry is not a lame duck and this is no bail out.”
The business secretary says the automotive industry is vital to British manufacturing and at the heart of many regional economies but was “in the frontline of the downturn”. He says the measures will boost the industry and lay “the foundations of its reinvention for a low carbon future”.
Lord Mandelson warns this is “no blank cheque” and any schemes supported have to provide jobs, develop new technology and processes for the long term and provide value for money.
Spending on skills training for employees will be boosted to £100m from its current £65m, if there is demand from the industry.
The Society of Motor Manufacturers and Traders welcomes the announcement. Paul Everitt, SMMT chief executive, says: ” The UK motor industry is productive and globally competitive with a long-term future at the heart of the low carbon agenda.”