Currently reading: MPs criticise car industry support
None of £2.3bn rescue plan has been paid out

None of the £2.3bn set aside five months ago to save the UK car industry has been handed out yet, the government has admitted.

Jaguar Land Rover is still in negotiations for a rescue package and was forced to cut 300 jobs and production of the X-Type this week.

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The flagship Automotive Assistance Programme (AAP) was unveiled by business secretary Lord Mandelson in February to offer loan guarantees, and Jaguar Land Rover has already been approved to get a loan of 340 million euros (£292m).

But the Business and Enterprise Committee said it was “astounded” that JLR had yet to see the money, saying the strategy to revive the industry needed more “urgency and consistency”.

“Once again the government has held out the possibility of action but has not yet delivered. We seek clarification of the government’s intentions,” said the MPs.

A spokeswoman for the Department for Business, Enterprise and Regulatory Reform told Autocar negotiations continued with 19 companies in the automotive sector who had applied for loans.

“We haven’t agreed with any of these companies yet on the terms and there have been no loan guarantees yet. It is for the long term and they need to be ready to make long-term investment plans.”

The car industry backed the findings of the committee and expressed "serious concern" about the effectiveness of the AAP.

“There is an urgent need for the AAP to start delivering the support the UK motor industry needs,” said the chief executive of the Society of Motor Manufacturers and Traders, Paul Everitt.

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