The Business Secretary sent out a clear message that there would be no hand-outs for struggling car manufacturers during a visit to the West Midlands – despite latest figures showing a drop in sales.
Dr Vince Cable, who was at Gaydon, near Warwick, to find out about Jaguar Land Rover’s new models, said the Government was not in a position to help individual companies.
During his fifth visit to the West Midlands since taking up his position in the Government, Dr Cable told the Birmingham Post: “We have been frank with the industry, we are not in a position to give out large amounts of money to individual car companies.
“In the emergency of the crisis two years ago, it was understandable that action had to be taken but we are not in that position now and I think the industry understands that but we can still help.”
During the visit to the test track at Gaydon, Dr Cable drove a number of JLR’s ‘conventional’ and new electric models including the Range Rover Sport Rehev and the electric and petrol hybrid, known as the Limo Green.
Dr Cable added that while automotive companies would not be given handouts, the Government was providing support through the Technology Strategy Board and the automotive council.
“JLR is a very good company and Tata has invested very strongly. I have met Mr Tata a couple of times since I became Business Secretary. We appreciate what they are doing in the UK. In terms of the role that Government can perform, one is on the training side – we have put more money into industrial apprenticeships – 50,000 more have been created despite the cuts.
‘‘We are investing in advanced technology which wouldn’t normally happen through the market – through the Technology Strategy Board and we have seen example of this with the Limo Green which has pioneering support.
‘‘We also have the automotive council where we bring all the companies together in the industry, the main suppliers and producers and as a result of the collaborative effort, the activity that used to be offshore through overseas component manufactures are now coming back to the UK. The Government acts as chair to support the collaboration.”
Despite recovering from the economic crisis and unveiling record-breaking profits of nearly £234 million in the last quarter, JLR plans to close one of its West Midland plants by the middle of the next decade.
The firm is considering the closure of either its Castle Bromwich plant in Birmingham or its factory in Solihull. But Dr Cable said the Government would not interfere with commercial decisions.
He said: “The issue about the plant closure is very much a commercial thing for them. I have met local MPs who are concerned and they are talking to the company though the unions but it’s not for the Government to interfere to tell the company how to organise production.”
He added: “The whole of the industry has taken a big hit, not just in Britain. I don’t think people fully understand the magnitude of the economic crisis that hit us – we had a massive collapse of the banking system – it’s never happened in our lifetime and the recession that followed destroyed a massive amount of wealth.
‘‘We took a massive hit but there is recovery – the job of this Government is to make sure the recovery is sustained.”
Figures show that UK car production in July dropped 8.9 per cent on the same month last year. Just over 98,000 cars were produced, according to the Society of Motor Manufacturers and Traders
But Dr Cable, who also visited the Warwick Manufacturing Group to test drive its WorldFirst Formula 3 car which can be powered by chocolate, steered by a wheel made from carrots and still capable of taking corners at 125mph, said the automotive industry is recovering and jobs would be created in the West Midlands.
He said: “I think it’s one month’s numbers so we shouldn’t be discouraged by that. The industry’s recovering from the depths of this terrible recession and the sense I have is that the mood in the industry is positive.
"We are moving to growth – particularly on exports – 80 per cent of the premium products are exported – the pound is competitive and the Government is helping to create a good environment for business so I am positive about what the industry has accomplished.”