Ministers have stepped in to provide an emergency bailout to Jaguar Land Rover after the motor manufacturer was left reeling by a massive cyber attack.
Chancellor Rachel Reeves has announced that she will provide the motor giant a £1.5bn loan guarantee to give it time to recover from the attack and protect the companies in its supply chain which have also been hit hard.
The move comes as Labour opens its conference in Liverpool with Keir Starmer and his government under pressure to show they can govern effectively.
Ms Reeves said: “Jaguar Land Rover is an iconic British company which employs tens of thousands of people – a jewel in the crown of our economy.
“Today we are protecting thousands of those jobs with up to £1.5bn in additional private finance, helping them support their supply chain and protect a vital part of the British car industry.”
The announcement follows business secretary Peter Kyle’s visit to JLR and supply chain firm Webasto this week.
The decisive action builds on the government’s commitment to the UK auto sector through the modern industrial strategy to boost growth and good jobs.
JLR was struck by hackers last month, forcing a halt to production and threatening the future of its supply chain.
It later emerged that the company was not insured for cyber attacks, leaving it struggling to get back on its feet.
The loan from a commercial bank, backed by the Export Development Guarantee (EDG) provided by export credit agency UK Export Finance, will be paid back over five years and bolster JLR’s cash reserves so it can support its supply chain which has been greatly impacted by the shutdown.
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.”
The government also recently gave Ford motor company in the UK a £1bn loan guarantee to help deal with the effect of Donald Trump’s tariffs.
Mr Kyle said: “We’re backing our automotive sector for the long-term through our modern industrial strategy and the landmark trade deals we’ve signed to boost exports.”
With plants in Solihull and Wolverhampton in the West Midlands, plus Halewood in Merseyside, JLR is one of the UK’s largest exporters, employing 34,000 directly in its UK operations.
It also operates the largest supply chain in the UK automotive sector, much of it made up of small and medium-sized enterprises, and employing around 120,000 people.
West Midlands mayor Richard Parker said: “This support is vital to the West Midlands – it will keep people in work, protect the smaller firms that rely on JLR and give our region the stability it needs while production is paused.
“I’ll keep working hard with ministers and industry to safeguard jobs and make sure our world-class automotive sector comes through this stronger.”
The support follows several significant actions by government in recent months to back the UK’s automotive sector, including securing landmark trade deals with India and the US to turbocharge export opportunities for UK companies by slashing tariffs.
The government also launched an electric car grant to support the transition to zero-emission vehicles and incentivise sustainable manufacturing, and slashed industrial electricity costs for thousands of companies through the British Industrial Competitiveness Scheme, as part of the modern industrial strategy.
The strategy also committed £2bn capital and research and development (R&D) funding for the auto sector to 2030, and an additional £500m to extend the R&D support for the industry to 2035.
