No 'open chequebook' for companies

Business Secretary Lord Mandelson conceded car firms had seen a sharp drop in demand, which was creating "a lot of difficulties", especially for Jaguar Land Rover.

He confirmed talks had been held with the Indian-owned car firm over the possibility of state assistance, adding he was "taking stock" of all the issues before making any decisions.

Figures from the Society of Motor Manufacturers and Traders showed the number of cars built in factories in the UK last month was 97,604, down by 33% on November last year, while commercial vehicle production slumped by 50%. Almost 1.4 million cars have been built so far this year, a 2.7% fall on the same period last year, the figures showed.

The SMMT said the rapid slowdown in output was caused by falls in domestic and export demand for vehicles, prompting officials to step up calls for "urgent support" to restore demand and loosen credit restrictions.

Paul Everitt, chief executive of the SMMT, said: "The UK motor industry is facing unprecedented challenges and urgent action is now required.

"Without swift action and the ability to access credit and finance, significant damage will be done to the nation's industrial capability, leaving the UK poorly equipped to take advantage of any global growth when it returns."

Jaguar Land Rover chief executive David Smith said it had received "no confirmation" from Government of any financial assistance. "We have, however, made it clear that we fully support the Society of Motor Manufacturers and Traders' (SMMT) call for a range of support measures for the car industry - suppliers, manufacturers and dealers - as has been forthcoming in other countries," he said.

In an interview with BBC News, Lord Mandelson said: "I and the Government as a whole, do not have an open chequebook for companies coming along and needing help. If there's appropriate assistance we can offer, then we will consider it.

"But people should not assume that we are, as a Government, in the business of bailing out every company that has a problem during this coming very tough period. The Government will apply some very tough tests to anyone in the private sector coming along and asking for particular assistance. I'm not closing the door in anyone's faces, but nor am I inviting people to form a queue outside that door, as if they can just come along and expect help from the Government."