Cable calls time on state backing for car industry

The car industry in the UK can no longer rely on direct state support, the Business Secretary warned yesterday, adding that the sector was no longer facing the crisis that threatened to cripple it a year ago.

Vince Cable used a visit to Burnaston, Derbyshire, where Toyota was launching its new hybrid car, the Auris, to warn that the Government would no longer provide blank cheques for the car industry.

MrCable, the former Liberal Democrat Treasury spokesman, said that aid in the future would be focused on areas such as greater deregulation, tax reform and additional training grants for apprenticeships.

The Business Secretary also suggested that any bid for support from General Motors (GM), for the development of its planned Ampera electric car, which the company is planning to build at its Ellesmere Port plant in Merseyside, was likely to be rejected.

The company, which last year asked forhelp from a number of governments in the form of loan guarantees to support its flagging European business, hasnotyet asked the new Government for help.

Aspokeswoman for the Department for Business, Innovation and Skills yesterday refused to categorically rule out state aid for GM, but stressed that help for the car industry would be “more intelligent in the future”.

MrCable said that while the Ampera project was attractive, he stressed that such projects “should not depend on Government support”.

The new administration is thought to consider specific support for the car industry, which was approved by Mr Cable’s predecessor, Lord Mandelson, as too expensive and contradictory to its policy of reducing the budget deficit and public spending.

Earlier this month, the Government did approve a loan guarantee for Ford and a grant for Japanese carmaker Nissan. Both deals had been agreed with the previous Labour government.

Mr Cable’s comments will worry those in the car industry, which has only recently begun to report better trading conditions after a miserable 2009. A number of economists, not least those in the new Office for Budget Responsibility, have predicted lower growth than had previously been estimated, and an uptick in the unemployment figures, which would put pressure on the fragile industry. However, MrCable was adamant yesterday that the car industry will beweaned off the safety net of government backing.

General Motors, which makes Vauxhall cars in the UK and the Opel marque in Europe, did not return calls yesterday, but in recent weeks it has signalled that it is in better shape than a year ago, when its US parent company filed for Chapter 11 bankruptcy protection and moved to sell its European operations.

It later decided against a sale, despite asking for support in the form of loan guarantees worth €1.8bn (£1.45bn), from the British, German, Spanish, Polish, Austrian and Belgian governments.

Earlier this month, the group withdrew its request for the guarantees to help it raise crucial financing from the debt markets.

GM’s poor credit rating would have meant that borrowing the money without public sector support would have been prohibitively expensive. When GMwithdrew the request it hinted that it had become frustrated by the slow progress of the discussions with a number of administrations.

Themove came just a week after the German government refused to back €1.1bn of loans, arguing that the company’s fortunes had improved sufficiently in recent months to render such a guarantee unnecessary.

Start your day with The Independent, sign up for daily news emails
Property
pets
Arts and Entertainment
tvThe C-Word, TV review
Arts and Entertainment
The Ridiculous Six has been produced by Adam Sandler, who also stars in it
filmNew controversy after nine Native American actors walked off set
Sport
Danny Jones was in the Wales squad for the 2013 World Cup
rugby leagueKeighley Cougars half-back was taken off after just four minutes
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before
'Queer saint' Peter Watson left his mark on British culture by bankrolling artworld giants

'Queer saint' who bankrolled artworld giants

British culture owes a huge debt to Peter Watson, says Michael Prodger
Pushkin Prizes: Unusual exchange programme aims to bring countries together through culture

Pushkin Prizes brings countries together

Ten Scottish schoolchildren and their Russian peers attended a creative writing workshop in the Highlands this week
14 best kids' hoodies

14 best kids' hoodies

Don't get caught out by that wind on the beach. Zip them up in a lightweight top to see them through summer to autumn
Robert Fisk in Abu Dhabi: The acceptable face of the Emirates

The acceptable face of the Emirates

Has Abu Dhabi found a way to blend petrodollars with principles, asks Robert Fisk