Inquiry blasts Government over delays in aid to auto industry

Jul 17 2009 By Jonathan Walker

They added: “The Government must not only support individual companies, but be seen to support the industry as a whole, and act with more urgency and consistency than it has done so far.”

Business Secretary Lord Mandelson announced an ambitious scheme to provide £2.3 billion in loan guarantees or loans to the automotive sector in January – but no money has been paid out so far.

Ministers also announced a scheme offering loans to smaller companies, with a turnover of up to £25 million.

But industry leaders told the inquiry this was not enough, and the MPs warned: “We share the concerns that the Government has not acted as quickly or decisively as other EU governments.”

France had made more than £7.5 billion available, while Germany had offered loans or guarantees of up to £77 billion, they pointed out.

The MPs said: “Worse still, there are perceptions that the Government does not have a coherent and supportive policy for the industry.”

The Government had still not provided guarantees needed for JLR to receive a much-needed loan of £340 million from the European Investment Bank.

The report praised the Government for introducing a £300 million for the Scrappage Scheme.