Business minister Ian Pearson has warned that government intervention to help major businesses would be “exceptional” and there will be no “open cheque book”.
The Dudley North MP made the comments in a letter to Birmingham MP Andrew Mitchell (Con Sutton Coldfield), who had written urging ministers to set out plans to support Jaguar Land Rover.
Mr Pearson said: “I appreciate the availability of finance is a key concern for the industry and can assure you careful and urgent consideration is being given to this. Any help will be considered on a case-by-case basis against set criteria. These will either be companies where the collapse will have a dramatic effect on an area in terms of unemployment, or businesses that specialise in areas Britain will need to achieve our aim of being a more broad-based knowledge-driven and low-carbon economy.”
Mr Pearson made his comments as business secretary Lord Mandelson was in India on a trade mission where he was expected to have talks with JLR owners Tata. The Birmingham Post is running a campaign calling for the government to guarantee credit lines for the luxury carmaker as it struggles through the credit crisis. Lord Mandelson is expected to hold talks with motor manufacturers on January 28 where it has been speculated he will announce a package aimed at improving consumer credit.
The joint leader of Britain’s biggest trade union vowed yesterday to fight any more job losses at JLR amid fears of fresh cuts.
The carmaker announced 450 job losses last week and there is mounting speculation up to 1,300 jobs could be lost because of the slump in sales.
Tony Woodley, joint general secretary of Unite, said: “We will not be accepting a single redundancy at Jaguar Land Rover. While we are having discussions with the company and the government regarding short-term working and how these workers can be kept in their jobs and off the dole, we will resist all redundancy proposals. Clearly, Jaguar Land Rover is facing severe difficulties and urgently needs help, including the commercial loan from the government which we have been pressing for now for months.
“But our strong view is that these difficulties are short-term and that it would be seriously damaging to the long-term future of the company if we lose skills and workers now, only to pay the price when the upturn in demand comes.”
Mr Woodley added: “If we don’t see a support strategy and direct financial help for the car and components industry coming forward from the government, then make no mistake, we are on a countdown to carnage.”
Jaguar Land Rover announced on Monday that it had halted work at its car plant in Castle Bromwich, Birmingham, for two weeks.
The factory assembles all the Jaguar XF, XJ and XK models, and currently employs about 2,000 workers.