If hopes were high that Chancellor Alistair Darling would finally put an end to the Government’s dangerous delaying game and act to stop the country’s motor industry disappearing down the recessionary plug hole yesterday they were quickly dashed.
True, he did (finally) announce a scrappage scheme to encourage owners of old bangers to trade them in for new models.
This comes months after Germany got its own scheme on the road and began seeing the benefit in the form of a 40 per cent rise in its new car market in March.
So enthusiastic was Mr Darling that he devoted 109 words to it yesterday – out of a speech of 7,395 words.
Nor did he give the full story. Only a trawl through the accompanying Treasury press releases, where the real details of every Budget lurk, revealed that the £2,000 inducement to car buyers would include a £1,000 contribution from the manufacturers. In other words, carmakers will have to pare their already reduced margins even more in order to shift metal.
The scheme will predominantly aid manufacturers of imported volume cars, but given the global nature of the industry and its supply chain any boost to sales will help keep everybody’s boat afloat.
Other than that, though, yesterday’s Budget was, as Jerry Blackett of Birmingham Chamber of Commerce and Industry put it, a damp squib.
There was no wage subsidy to help keep trained and valuable automotive workers in work and no word about the liquidity loan guarantees that companies such as Jaguar Land Rover so urgently need in order to maintain some semblance of cash flow in these straitened times.
Mr Blackett accused business secretary Lord Mandelson of making “hollow promises” to the automotive industry, which has been accused by its singularly ill-informed critics of demanding bail-outs when what it wants more than anything is a temporary replacement for the normal credit lines denied it by the bailed out banks.
Jaguar Land Rover at least has its £270million loan from the European Investment Bank in place. But that will cover only part of the company’s £800million programme to develop the next generation of greener and more fuel-efficient cars.
There has been no word yet of its application for further short-term aid at commercial rates. If that doesn’t come soon there could be big trouble ahead for the West Midlands.
After all, there is little point in a company planning future products if its day-to-day lack of working capital headroom puts it out of business.