He said neither JLR nor Tata were asking the Government for a “bail-out”, as many commentators have said, but a loan, or loan guarantee, at commercial rates to “enable them “to get on with developing and making high quality cars”.
“The argument is about access to finance and guarantees at commercial rates given that the (heavily subsidised) banking system now seems unable to do the job properly.
“And the cast list of people lining up to argue in favour of intervention on commercial terms includes very respected figures like Lord Bhattacharyya and CBI director-general Richard Lambert.”
Prof Bailey also pointed out that some opponents of intervention also call for public funds to be used to finance the development of new green technologies.
“Yet this is, in fact, exactly what JLR are doing in developing hybrid engines and lightweight composite materials, especially for the LRX concept car.
“Indeed, JLR accounts for as much as 50% all R&D (some £400m a year) spend in the UK auto industry, so if you really want to green the industry the place to do it is by supporting JLR which is working with suppliers and universities to cut carbon emissions.”
Prof Bailey went on to stress that the collapse of JLR would not only rob the country of a key position in the development of green technologies but would also cost the Exchequer the equivalent of up to 40% of the company’s turnover in lost tax, VAT, national insurance contributions and unemployment benefits.”
* JAGUAR yesterday unveiled the new XF Diesel S, its “most advanced, powerful and efficient” diesel ever, with average fuel consumption of 42mpg and CO² emissions of 179g/km.
