British government launches car industry aid package

Wednesday, January 28, 2009

The British government has announced a £2.3 billion package of aid to attempt to support the country’s car manufacturing industry.

Lord Peter Mandelson, the Secretary of State for Business, Enterprise and Regulatory Reform announced to the House of Lords that the government planned to obtain £1.3 billion from the European Investment Bank for the industry. A further £1 billion loan is available if the industry agrees to invest it in environmentally friendly vehicles.

Mandleson told the Lords that the industry is vital to the British economy, which with “near one million employees from manufacturing to retailing” provides “£10 billion worth of added value to the economy.” However, he stressed that the government was not providing a “blank cheque” and would not provide operating subsidies.

His newly-appointed shadow Kenneth Clarke told the House of Commons that the plans were “pretty small beer” and repeated the Conservative charge that the government was “dithering” in the face of the downturn. Liberal Democrat John Thurso also expressed disappointment in the plans.