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Government publishes response on automotive industry support

News Release issued by the COI News Distribution Service on 21 September 2009

Government is doing all it can to support the car industry helping it to adapt and survive so it can emerge stronger and better able to deal with future challenges, Business Minister Ian Lucas said today.

Mr Lucas made the comments as he published the Department for Business Innovation and Skills (BIS) response to the Business & Enterprise Select Committee’s report, ‘The Automotive Industry in the UK’.

Government has already taken substantial action to support the UK car industry and last week made the first loan from the Automotive Assistance Programme (AAP). Tata Motors TMETC has been given a £10 million loan to support the development and manufacture of electric vehicles in the UK.

Business Minister Ian Lucas said:

“These are tough times for the car industry and because it is one of the key sectors of our economy we must support it now and in the future.

“We have acted to support it in the short term through £300m support for the scrappage scheme, so far helping over 200,000 people to order a car now instead of waiting, and I have heard direct from the industry that it has benefitted enormously from the scheme.

“Our assistance does not stop there. It’s not just about what we can do in the short term. We must invest in the future. That’s why in addition to the AAP, we are helping the car industry to take advantage of the opportunities that moving to low carbon present. We have already set aside £250 million for consumer incentives and infrastructure and we will continue to support low carbon car development.”

Ministers continue to consider a number of other bids for assistance from the programme’s budget to help the industry meet consumer demand, protect it from the down turn and help it to become a world leader in low carbon cars. There are already on going negotiations with companies to fund projects with a total value of £2bn. The Government is also considering applications to the scheme that are below the £5m project limit in order to extend support to smaller companies in the supply chain.

Notes to Editors

1. To view a copy of the Government’s response to the BERR Select Committee’s report ‘The Automotive Industry in the UK’, please go to www.bis.gov.uk/aap

2. The Automotive Assistance Programme (AAP) is the Government’s long-term reinvestment of the automotive industry through a support package. It provides loan guarantees (or, exceptionally, loans) to the UK automotive sector.

3. The AAP aims to unlock a total bank and EIB support package of up to £2.3bn to provide support for automotive companies as they invest to create or sustain jobs, develop cutting-edge technology, bring special value to the UK, maintain R&D in UK vehicle manufacturing and support the development of green technologies. For further details please go to www.bis.gov.uk/aap

4. The Business & Enterprise Select Committee launched their inquiry into AAP on 25 March, and published their recommendations on 17 July.

5. The Government announced its strategy for Ultra Low Carbon Vehicles in the UK in March 2009, including £250m for consumer incentives and infrastructure.

Department for Business, Innovation & Skills

The Department for Business, Innovation band Skills (BIS) is building a dynamic and competitive UK economy by: creating the conditions for business success; promoting innovation, enterprise and science; and giving everyone the skills and opportunities to succeed. To achieve this it will foster world-class universities and promote an open global economy. BIS - Investing in our future.

Contacts:

BIS Press Office
NDS.BIS@coi.gsi.gov.uk

Joshua Coe
Phone: 020 7215 5943
Joshua.Coe@bis.gsi.gov.uk