Mandelson wary of Jaguar action

Sunday, 21 December 2008 12:00 AM

Lord Mandelson has said Jaguar's owners Tata should be the first to help the struggling car maker.

The government has come under pressure to assist UK-based car businesses after the US unveiled a $17.4 billion (£11.6 billion) loan to General Motors and Chrysler to help the manufacturers stave off bankruptcy proceedings.

But today's comments from the business secretary have diminished hopes the government may take action.

Yesterday, Confederation of British Industry director-general Richard Lambert called for financial assistance to be provided urgently to the car sector. A senior Labour peer, Lord Bhattacharyya, also called on the business secretary to help car manufacturers by arranging a loan similar to the one granted by the US.

Speaking to the Observer, Lord Mandelson insisted the onus for assisting Jaguar lay with its foreign owners.

"I am closely following the fortunes of Jaguar Land Rover. My officials are in close touch with the company. The government cannot be the first call for help in these circumstances," he said.

"The company's owners have got to look to themselves and their own resources. If there is anything the government can appropriately do for any such company, then they will have to meet - and pass - some pretty tough tests."

The business secretary insisted that the government would take a "pragmatic" approach on the issue, adding that he was listening to the concerns of the car industry.

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