Clearance for loan package; AID: Lord Mandelson outlines help for the auto industry.

Byline: By Jon Griffin

BUSINESS Secretary Lord Mandelson today urged Jaguar Land Rover to seek aid from a newly-approved pounds 2.3 billion loan package and said: "We are moving as fast as we can."

The Cabinet Minister revealed the Government had now obtained clearance from Brussels for loans and guarantees of up to pounds 2.3 billion - five weeks after he unveiled the initiative.

In a letter, Lord Mandelson, pictured, said: "The West Midlands is at the heart of Britain's car industry.

The region accounts for about a quarter of the total number of people in the industry.

"And Jaguar Land Rover with its plants at Solihull, Castle Bromwich and Whitley, along with its world-class research and development facility at Gaydon, is at the core of the industry in the region.

"The Business Department is working closely with the industry and the people who work in it to assess the impact of the 'credit crunch' downturn and to devise measures to tackle the challenges facing it.

"The industry is in the front line of the current economic downturn with output falling faster and further than any other manufacturing sector. We are determined to prevent an irreversible loss of key capability, skills and technology.

"We are very aware of the industry's need for us to move with speed. I am pleased to announce that last Friday we obtained clearance from Brussels for loans and guarantees of up to pounds 2.3 billion. We are moving as fast as we can."

Lord Mandelson said companies such as JLR now needed to press ahead with "fully worked-out applications. These poten- will schemes tially help the whole sector.

And Jaguar Land Rover, as a leading force in the industry, is well placed to seek support."

Lord Mandelson's response - a month to the day after the West Midlands Auto Industry Summit at the International Convention Centre - came under fire from experts and politicians.

Professor David Bailey of Birmingham Business School said: "It is disappointing that the Government seems to be spending all of its time re-structuring and rescheduling its banking bail-outs but it is missing the point of why the banks are being bailed out in the first place which is to help the real economy and get business moving again."

Sutton Coldfield Conservative MP Andrew Mitchell said: "None of this is necessarily unhelpful but it is desperately slow, and continues to be unclear and opaque."