The government has announced a package of measures to support the UK car industry through the global recession.
Lord Mandelson told the House of Lords this afternoon that the industry supported nearly one million employees, who add nearly £10bn a year to the UK economy.
The package centres around loan guarantees, with £1.3bn of government backing to loans from the European Investment Bank.
The government will also provide a further £1bn of investment for worthwhile projects not eligible for ECB support.
The measures have received a qualified welcome from industry leaders.
“We’re happy at the moment and pleased that the car industry is the only one with specific support from government,” said SMMT chief Paul Everett. "But we want to find out from our meeting with government tomorrow how easy and effective it will be to get access to this funding."
Mandelson did not give any guarantees over additional funding for loans for new car buyers, a measure that many in the industry have been crying out for, but confirmed that he had asked former banker Mervyn Davies, now Trade and Investment minister, to examine the issue.
“We’re looking at steps to improve car company financing arms access to funding, ” he said.
The lack of this support is the main defect of the package, believes Everett.
“This package won’t provide a consumer stimulus, the £2.3bn will help manufacturers and suppliers, effectively with bridging loans," he said. "We’ll have to wait until the Budget for any consumer measures.”