Cash aid plea for car industry

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Director general Richard Lambert said ministers needed to act with "urgency" to save an industry that is "vital to our future". With 800,000 jobs reliant on car-making in the UK, Mr Lambert said taxpayers could afford to provide short-term loans for ailing firms.

His comments come a day after Business Secretary Lord Mandelson said the Government did not have an "open chequebook" to help struggling companies.

Mr Lambert described Jaguar Land Rover, which has been in talks with ministers over getting access to short-term loans, as a "vital part of our manufacturing industry".

Car firms have seen sales drop by a third in recent times, he said, at the same time as they were finding it hard to get access to credit. The industry was not asking for a bail-out but only wanted the same access to cash that the banks had been given.

Mr Lambert told BBC Radio 4's Today programme: "The Government has to stand in and put the public balance sheet behind an industry which is vital to our future. The whole industry needs access to credit and I think this is something the Government could do and should do with urgency."

Asked whether the public purse could afford it in light of the bank bail-outs and increased borrowing announced in the Pre-Budget Report, Mr Lambert said: "Yes, it certainly can. This is not money that's being given away, it's money that will be repaid."

He added: "They are not asking for blank cheques or bail-outs, they are simply saying 'Let's have the same availability to credit that the banks have got'."

Mr Lambert said Jaguar Land Rover was a profitable company last year which spent £800 million a year on green technologies and £400 million on research and development.

And asked whether Lord Mandelson should ignore Treasury caution about providing cash for car-makers, Mr Lambert added: "I would say make sure that the industry, which is a viable, productive industry, has access to the money it needs to get it through this tough spot and back into profitability and growth."