Downing Street Says » Car Announcement

Asked for more detail on the car industry announcement, the PMS advised people to wait for the statement. Lord Mandelson and the department had been making clear that in our view, the car industry was a sector with a strong future. This was not only about being in a position to provide some support to help them get through this difficult period but also, this was how we provided the right support for them in the future.

Put that if support was given to the car industry, what was the position on giving other industries support, such as the steel industry, the PMS advised people to wait until the statements later today. Our general position had been set out very clearly by the Prime Minister yesterday when he had described the Government s stability and recovery plan.

That involved first of all, taking action to recapitalise the banks, secondly, a fiscal stimulus to get demand in the economy moving again and providing the resources to enable well targeted interventions of the type that we would be seeing in relation to the car industry and thirdly, getting lending moving again which had been the point of the announcements last week.

It was important that people were clear that any interventions we made would be well targeted and they would be in order to ensure strong, viable businesses got the liquidity and the short-term credit that they needed to get through this difficult period.

Asked whether this would involve an actual cash injection, the PMS made it clear that this was not a bail out. Lord Mandelson would be making it clear that provision was set aside at the Pre-Budget Report for a number of subsequent interventions and we would be allocating some of that provision that was set aside. This would help what the Government believed to be fundamentally sound companies get through a difficult period because of the short term difficulties they were facing in relation to credit conditions and what was happening in the global market.

Asked whether Lord Mandelson would still be meeting with representatives of the car industry tomorrow, the PMS said that he would be and added that Lord Mandelson wanted to make the announcement to Parliament today, so that he could discuss the package with the representatives tomorrow.

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» Tuesday, January 27, 2009

Car Announcement

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