A £1.5billion bid to save thousands of jobs at risk from the Jaguar Land Rover shutdown was unveiled last night.
Business and Trade Secretary Peter Kyle announced a loan guarantee scheme to keep afloat small firms that supply the car maker and which employ about 120,000 people.
The move – announced on the eve of the Labour Party conference – comes amid fears that some of the small companies were just a week away from collapse.
JLR, Britain’s biggest car maker, suspended production after a devastating cyber attack last month and is only due to resume operations from next month.
Mr Kyle said: ‘This cyber-attack was not only an assault on an iconic British brand, but on our world-leading automotive sector and the men and women whose livelihoods depend on it.
‘Following our decisive action, this loan guarantee will help support the supply chain and protect skilled jobs in the West Midlands, Merseyside and throughout the UK.’
Chancellor Rachel Reeves said the move would protect jobs in what was ‘a jewel in the crown of our economy’.
She added: ‘Today, we are protecting thousands of jobs with up to £1.5 billion in additional private finance.’
But the move follows mounting concerns that some of the small firms that supply JLR’s plants in Solihull and Wolverhampton in the West Midlands, and Halewood in Merseyside, were just a week away from collapse.
Tory business spokesman Andrew Griffith welcomed the move but criticised ministers for being too slow to step in.
He said: ‘Ministers have got to the right place but took too long to get there.
‘Labour must now also pick up our suggestion of a cyber reinsurance scheme to protect British businesses from state-backed actors in an increasingly dangerous world.
‘Britain’s firms and manufacturers deserve a government that is not distracted by scandals and infighting and that understands business.’
Final details of the loan scheme will be worked out. But sources said it would allow JLR to take out commercial loans to advance money to key suppliers and keep them afloat until the car maker resumed full production.
Last week, JLR said that parts of its IT systems were back online and could begin to clear a backlog of payments to suppliers.
A spokesman said: ‘The foundational work of our recovery programme is firmly under way.’
