| Secretary of State for Business, Peter Mandelson, | | | | The headline-grabbing measure was the |
| has made a statement on British government | | | | announcement of guarantees to 'unlock' loans of |
| plans to help the car industry. | | | | up to £1.3 billion from the European |
| Much hyped since December as a 'bail out' | | | | Investment Bank (EIB). |
| following growing job losses and temporary shut | | | | A further £1 billion in loans was offered to |
| downs, the statement proved a disappointment | | | | fund non-EIB eligible investment that would be of |
| for the industry as very little of substance was | | | | particular benefit to Britain or to the advancement |
| evident in the government's plans. | | | | of green technology. |
| One of the most-trailed potential measures was | | | | Responding later in the House of Commons, |
| help for car company finance arms, to enable | | | | Mandelson's 'shadow' for the Conservatives, Ken |
| people who still want to buy a new car to get a | | | | Clarke, claimed that these loans had been |
| loan in these times when banks are less keen to | | | | announced previously and were nothing new. |
| give credit. | | | | Mandelson said that assistance would be |
| Such a plan would at least target the main | | | | considered on a "case by case" basis. Evidently |
| problem - that demand for new cars has dropped | | | | seeking to slay any ghosts of the car industry's |
| off a cliff and car makers now have stockpiles of | | | | troubled 1970s, he made clear that there would |
| unsold cars. | | | | be "no operating subsidies" for manufacturers. |
| However it would not be specific help for British | | | | Details as to the criteria by which applications for |
| industry, as EU single market rules would prevent | | | | financial assistance will be judged were not given, |
| it being tied to the purchase of only British-made | | | | but may emerge after a looming 'car summit' |
| models. | | | | between government and major players in the |
| Yet despite the hype, all that the statement | | | | industry. |
| offered is that the government is "looking at | | | | Long term fantasy |
| steps" on this front. This has been condemned as | | | | Speaking in the House of Lords, where there is no |
| a feeble response when the industry's troubles | | | | elected opposition to question him, Mandelson said |
| have been evident for months and action is | | | | that the government's proposals were designed |
| desperately needed. | | | | to 'lay the foundations for a low carbon future'. |
| The Treasury is thought to be opposed to the | | | | However, such 'low carbon future' long-termism is |
| idea, fearing it would set a precedent and open | | | | completely misplaced when, unless critical short |
| the floodgates to demands from other industries | | | | term problems are relieved, there may very soon |
| for the same treatment. Particularly from those | | | | be little car industry left. |
| within the also much-troubled electronics and | | | | Those most critical problems were largely ignored |
| furniture retail sectors. | | | | by the government's statement. |
| Loan guarantees | | | | |