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Motoring news

Car loan package 'not enough'

28/01/2009

Workers and business groups have warned that the Government's latest attempt to shore up the UK's struggling car industry does not go far enough.

Business Secretary Lord Mandelson announced a £2.3 billion package of Government support for the car industry on Tuesday, which he said "will help companies speed their way to becoming greener, more innovative and more productive".

Much of the support takes the form of loan guarantees, which would only be available to car manufacturers investing in low-carbon technologies.

Richard Lambert, director-general of the Confederation of British Industry, said the move was a "positive first step", but that it was unclear how quickly and easily car-makers would be able to access the funding.

"The industry relies on credit to complete customer purchases," he said. "Without access to that credit, car-makers will continue to scale back production and cut jobs."

Unite, Britain's biggest workers' union, said that the package was "too little" and would leave the threat of redundancy hovering over thousands of skilled jobs.

Tony Woodley, joint general secretary of Unite, said: "Two billion pounds sounds like a lot of money, but at least half of this will be taken up by Vauxhall and Jaguar Land Rover alone, leaving little or nothing for the hundreds of component companies."