Business secretary Lord Mandelson has told MPs that talks regarding a loan for Jaguar Land Rover are ongoing, and Britain needs the the “green” technologies pioneered by Jaguar Land Rover.
He refused to be drawn on the precise details of any such scheme, but under cross-examination by the Business and Enterprise Select Committee, he accepted the car industry is facing huge difficulties due to the credit crunch and remains a major asset which the country can ill afford to lose.
Mandelson told the committee: “I share your concern about this sector. It is a really important employer, a really important researcher and developer of new technology.
“I want to see it remain as an important part of Britain’s manufacturing base.”
Lord Mandelson said the whole car industry is facing a serious loss of demand, which may never be fully restored to pre-slump levels, but the government is prepared to do “whatever is necessary” to help.
He said: “I am currently in discussions with the industry’s representatives. I saw them before Christmas and I am going to see them again at the end of this month to see what appropriate help and intervention we can provide.”
Mandelson will also discuss possible European intervention and aid when he meets EU fellow ministers in Brussels on Friday.
He said: “Jaguar Land Rover accounts for about half of all research and development in the UK’s automotive sector.”
One option under consideration is to target aid at the company’s research and development programme.
Lord Mandelson said: “We are talking about £480m spent on research and development by the company, investing heavily in low-carbon technology. That is very important, not just for the auto industry, but for manufacturing in this country.
“I would say it would not be right for anyone to stand by and see this sort of investment go to the wind just because of the financial circumstances we are facing.”