Osborne calls for JLR action during visit to Post HQ

Mar 9 2009 by Anna Blackaby, Birmingham Post

Shadow chancellor George Osborne called for the government to “live up to its side of the bargain” over Jaguar Land Rover following last week’s decision by employees to accept a pay freeze and a shorter week.

Mr Osborne said the agreement reached by JLR workers to accept a shorter working week and a one-year pay freeze showed employees and management were prepared to make some tough decisions and called for the Government to follow suit.

“Those two groups - the management and the workforce - they have come together. They have done that deal to make sure costs are kept down and they have taken some tough decisions on pay.

“I think now it’s the obligation of the Government to live up to its side of the bargain.

“Since October, which is now five months away, the Government has been promising help for the car industry and nothing has been delivered.

“We have had plenty of car summits, plenty of visits by Peter Mandelson and Gordon Brown, but what we have not actually had is real help coming through to companies like Jaguar Land Rover and their suppliers and other businesses across the West Midlands.”

Mr Osborne was speaking at the Birmingham Post’s offices at Fort Dunlop during a visit to the city which also saw him address the Birmingham Chamber of Commerce.

He described JLR as a “fantastic company” with second-to-none production facilities and said it was a tragedy it was not getting the help it needed.

“We have a good company, not a company with a union problem or that no-one wants to buy its models. It’s a company with a credit problem and here the government can help.

“The government should be able to support that company by underwriting its loans and providing loan guarantees. That is not happening at the moment and that is a tragedy,” he said.

The Conservatives are calling for a £50billion National Loan Guarantee Scheme to get credit flowing and underwrite bank lending to businesses.

Asked whether LDV would also be a contender for government support through such a scheme, Mr Osborne said: “A company like LDV or JLR should have the chance to put their case to a national loan guarantee scheme and if the judgment is it is an innocent victim of the credit crunch, they should get support.”

Mr Osborne said the Conservatives were closely studying European examples of wage-subsidy schemes at manufacturers hit by the downturn, but said “you have to make sure that the maths add up.”

He added: “There is certainly a case for helping somebody who has become unemployed get a new job by saying to a new employer who takes them on: “we will cut your national insurance, we will give you, in effect, a tax rebate because the cost of the unemployed person is high.””

Mr Osborne attacked the Prime Minister over his lack of long-term vision for the British economy.

“Gordon Brown wants to pump up the balloon again and thinks we can go on living beyond our means. The truth is, as people in business and families in the West Midlands know, that we can’t build an economy on debt again.

“Households, business and government have to learn that they can’t make do with the same levels of debt that they have had in the past.

“We need an economy that’s based on much surer foundations of savings and investment and then we can avoid some of the problems we have got at the moment.”