British business minister warns on aid to car makers: report

29th June 2010, Comments 0 comments

Britain's business minister has warned car makers they can no longer rely on direct government aid, saying the "emergency" situation in the industry is over, in comments Tuesday in the Financial Times.

The country's previous Labour administration offered direct support to the sector as the economic crisis sent new car sales plummeting, notably with a scheme allowing motorists to trade in a vehicle for a discount on a new one.

But Business Secretary Vince Cable, who has held the role since his Liberal Democrats formed a coalition last month with the larger Conservative party, ruled out "direct support" for companies.

"We don't want to go around the country waving a chequebook," he told the FT, in comments the paper said were aimed at car makers as he made his way Monday to a car launch at a Toyota factory in central England.

"We're moving away out of an emergency time, and support will come in more indirect ways," said Cable.

"Not in direct support for companies -- we don't have the funding to do that, and it isn't good policy anyway."

Britain is currently battling to reduce a record deficit after its worst recession for decades.

He said US car maker General Motors had not approached the government about a grant to produce the Ampera car in Britain, but added that such "projects shouldn't depend on government support".

GM is hoping to build the electric Ampera, which goes on sale in late 2011, at its plant in northern England, according to the FT. GM operates in most of Europe through its Opel unit, and in Britain under the name Vauxhall.

© 2010 AFP

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