Automotive Industry in Uk

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House of Commons Business and Enterprise Committee

The Automotive Industry in the UK
Ninth Report of Session 2008–09
Report, together with formal minutes, oral and written evidence Ordered by the House of Commons to be printed 7 July 2009

HC 550
Published on 17 July 2009 by authority of the House of Commons London: The Stationery Office Limited £0.00

The Business & Enterprise Committee
The Business & Enterprise Committee was appointed by the House of Commons to examine the expenditure, administration, and policy of the Department for Business, Enterprise & Regulatory Reform. Current membership Peter Luff MP (Conservative, Mid Worcestershire) (Chairman) Mr Adrian Bailey MP (Labour, West Bromwich West) Roger Berry MP (Labour, Kingswood) Mr Brian Binley MP (Conservative, Northampton South) Mr Michael Clapham MP (Labour, Barnsley West and Penistone) Mr Lindsay Hoyle MP (Labour, Chorley) Miss Julie Kirkbride MP (Conservative, Bromsgrove) Anne Moffat MP (Labour, East Lothian) Mr Mark Oaten MP (Liberal Democrat, Winchester) Lembit Öpik MP (Liberal Democrat, Montgomeryshire) Mr Anthony Wright MP (Labour, Great Yarmouth) Powers The Committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the Internet via Publications The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the Internet at Committee staff The current staff of the Committee are: Eve Samson (Clerk), Ben Williams (Second Clerk), Janna Jessee (Inquiry Manager), Louise Whitley (Inquiry Manager), Anita Fuki (Senior Committee Assistant), Eleanor Scarnell (Committee Assistant) and Jim Hudson (Committee Support Assistant). Contacts All correspondence should be addressed to the Clerks of the Business and Enterprise Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 5777; the Committee’s email address is


1 Introduction
The current state of the United Kingdom automotive industry The future of the industry Page

4 6


The Automotive Assistance Programme
Are the criteria right? Other assistance The scheme in practice

8 11 11


Other support for the automotive industry
Support for LDV Scrappage Scheme Automotive finance Short time working and train to gain

15 16 16 17


Government support for the industry as a whole Conclusions and recommendations

21 25

Formal Minutes Witnesses List of written evidence List of Reports from the Committee during the current Parliament

28 29 30 31


1 Introduction
1. The Automotive Assistance Programme was launched on 27 January 2009, as an attempt to support the industry through the economic crisis. We announced our inquiry into the Automotive Assistance Programme (AAP) on 25 March 2009. We invited evidence on the following points: • •

the definition of ‘eligible companies’; the application criteria for the types of projects that are covered by the AAP, including the focus on low-carbon projects; whether the £5 million threshold excludes too many SMEs; the criteria used for awarding loans/loans guarantees, and how this compares with the criteria used by the EIB; the degree to which the award of support through this scheme has prevented, or is likely to prevent, companies from abandoning projects or moving them out of the United Kingdom; whether other measures, such as scrappage or support for car finance companies, are required; and any other views stakeholders think the Committee should be aware of.

• •

2. Our intention was to hold a single session on the effectiveness of the programme itself. However, events have moved fast. Since we took our...
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