Inquiry blasts Government over delays in aid to auto industry

Jul 17 2009 By Jonathan Walker

The Government was today accused of putting hundreds of thousands of jobs at risk by failing to give the automotive industry the support it needs to survive the recession.

A scathing report by a Commons inquiry attacked Ministers for dithering while countries such as France and Germany acted to help their motor industry.

And MPs said they were “astounded” that it had taken so long to get finance to West Midlands-based carmaker Jaguar Land Rover (JLR), which has axed 2,200 jobs over the past year.

The findings were published by the Business and Enterprise Select Committee, which quizzed a range of leading industry figures as part of an inquiry into the future of the automotive sector.

They included David Smith, Chief Executive of Jaguar Land Rover, as well as managers at Toyota and Leyland Trucks. The inquiry also heard evidence from ministers, civil servants and union leaders.

Earlier this week, Jaguar announced it was to axe production of its XType saloon at its Halewood factory in Merseyside, with the loss of 300 jobs.

And Mr Smith warned of more job cuts to come, saying “further action” would be determined by the state of the market and how quickly a promised Government-backed loan of £292 million was forthcoming.

The automotive industry supports an estimated 384,000 jobs across the country, and six per cent of all research and development undertaken in the UK.

MPs warned that vehicle manufacturing could “flourish” in the UK, “but its long-term future depends on government taking the right actions now to ensure that the industry is sustained through this period of crisis.”