» Tuesday, January 27, 2009

Motor Industry

Asked why the Government rejected the idea of paying car firms to put people on short-term contracts, the PMS said that we wanted to help the car industry at what was a difficult time for them. This was a sector of the economy that had seen one of the sharpest contractions in output recently. We needed to make sure that we helped in a way that made them stronger for the future, and that was why there were measures in the package to promote the production of low carbon cars. In relation to wage subsidies, we continued to look at these issues, but we were not convinced that such a scheme was what we needed at this point.

Asked if this was the first time in the current recession that there had been sector specific Government intervention and if it was the first time the Government had loaned money directly to an industry, the PMS said that the reason we were supporting the car sector in this way was because it was a huge investor in research and development, especially in important green technologies. These were high-skill, high-value manufacturing companies that, in the Government s view, were viable and had a strong future. However, they had to change in order to be able to compete in the future, and they needed particular support in order to develop the production of low-carbon cars. There were a number of specific factors in relation to the car industry and that was why we had chosen to support them in this particular way.

Put that the Government were picking winners, the PMS said that he wouldn t characterise it in those terms. This was about putting a framework in place for the industry as a whole, which enabled the industry to get the support it needed, whilst being able to change for the future.

Put that Ken Clarke had called Lord Davies actions inadequate, the PMS said that we did not accept that. Lord Davies was someone who brought a huge amount of expertise to this area.

Asked if the Government would rule out more loans to car industries, the PMS said we had today set out a comprehensive package for the car industry.

Asked if the car summit was happening tomorrow and if so why it was happening after the announcement, the PMS said that the car summit was happening tomorrow. It was important to make the announcement to Parliament today so that Lord Mandelson could then discuss it with the car industry tomorrow. If we had not made the announcement to Parliament this afternoon then it would have been difficult to discuss it with the car industry at tomorrow s meeting.

Put that it sounded like a take it or leave it offer, the PMS said that we believed that this was a good package for the car industry and one that they would welcome.

original source.

Briefing took place at 16:45 | Search for related news

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