Government business secretary Lord Mandelson has
unveiled a package of loans for car manufacturers and their major
suppliers. The cash is formed of £1.3bn from the European Investment
Bank and a further £1bn to fund investment in eco-friendly vehicle
development.
Speak in the House of Lords, he said around one
million jobs are dependent on the British car industry, which
contributes £10bn to the overall economy. It was therefore essential,
he explained, to provide help.
"This industry is not a lame duck and this is not
a bailout", said Lord Mandelson. The automotive sector is vital to the
UK’s overall economic health and this package was therefore an
essential lifeline “to prevent an irreversible loss of capacity,
skills and technology”.
The proposals were dismissed a as “placebo” by
Tory opposition spokesman Lord Hunt of Wirral, while Tony Woodley,
head of the Unite union, warned that without strong Government
intervention the UK’s automotive industry was heading for disaster.
A spokesman for the Prime Minister's said: "Lord
Mandelson and the Department have been making clear that, in our view,
the car industry is a sector with a strong future. So not only are we
in a position to provide some support to help them get through this
difficult period but also, and this will be a very important part of
the announcement, this is about how we provide the right support for
them in the future."