Politicos: 'There is a good strong case for government intervention' on JLR cyberattack
Covid-style financial support? Nothing to confirm yet, say MPs
The chair of the UK's business and trade committee says the situation at Jaguar Land Rover is likely to get "harder and harder over the next week or two," but stopped short of confirming that the government might intervene with financial support.
Labour MP Liam Byrne told BBC Radio 4's Today show on Wednesday that the need to offer JLR support following its cyberattack, which will halt production for at least a month, was growing more urgent with each day.
"It doesn't sound like [the government is] helping today," said Byrne. "So, the Business and Trade Committee on behalf of Parliament is bringing together suppliers from across the supply chain tomorrow, in order to try and get to the bottom of exactly what's going on and what the impact of an extended delay would be. And I think there is a good strong case for government intervention."
Automotive chiefs at workers' union Unite have called for Covid-style financial support schemes to help JLR supply chain workers, who are already being made redundant less than a month into the cyberattack.
Byrne said the government's has not committed to providing support yet, but it has written to the chancellor to explore options.
He said: "This is a huge cyber shockwave that's rippled through the supply chain, and people are now losing their jobs through no fault of their own.
"That's bad for the automotive industry. We need those skills and those people kept attached to those firms. And we can't just have a cyberattack take down one big manufacturer like Jaguar Land Rover, and the supply chain then go down because it's incredibly difficult to put it back together again, once things are back up and running."
The committee chair's radio appearance follows business secretary Peter Kyle's visit to the West Midlands on Tuesday, where JLR and many of its suppliers are headquartered, to understand the full impact of the attack on all organizations involved.
Speaking to ITV News, Kyle said that he and pensions minister Pat McFadden "are very aware that the state is going to have to step in, in some areas, but we do have a responsive, reflexive, proactive state that will do everything it can – this government will do everything it can to support workers in the workforce, in transition, and those who fall out as a result of this tragedy, this attack on one of our great businesses – we will be there for them."
He went on to say that he was aware of suppliers already making workers redundant and encouraging them to claim universal credit benefits.
"There are thousands of companies in the supply chain to JLR," said Kyle. "Each of them has different stresses and strains, each of them will be in different levels of distress as a result of the shutdown.
He added: "Each company is going to be in a different situation. They will have different periods of liquidity ahead of them. They will have different liabilities. Some of them will be very capital-intensive, but actually have a small workforce. So, there isn't going to be one rule for every company. Now, for those highly distressed companies, they might well have to take radical action in order to preserve the company and make sure that it bounces back."
Kyle repeatedly dodged questions about whether the government is preparing to offer JLR financial support, saying that his visits to JLR and other suppliers were purely for the purposes of understanding the wider impact of the attack.
He said the government is acting as "a partner to help JLR and its supply chain through this period [and] come back into production as soon as possible."
The idea of offering financial support to JLR out of taxpayer funds has divided the public, and Conservative MP Kevin Hollingrake said this week that JLR and its parent company Tata Group are wealthy enough to financially support their own supply chain.
Kyle said: "JLR is a profitable company, it is backed by a wealthy global company, and it is a private sector company with a predominantly private sector supply chain.
"JLR should be, and is to my knowledge, doing what it can in a responsible way in this difficult moment. I have been very clear that they must do all they can to protect the jobs not just in JLR, but to think carefully about their responsibility to the workforce all the way down the supply chain."
The situation at JLR is somewhat unique due to the company's significance to the UK economy. Any potential financial support, or "bailout," would not be the same as if the same measures were approved for any other private company.
Some have argued that the impact to the British economy is wider than lost output from JLR itself, but comes about via the potential supplier insolvencies and resultant job losses, meaning a support package would not protect just the company – but the British economy as a whole.
Asked whether the government's reluctance thus far to introduce a support scheme was a mistake, Byrne said the situation has "got the potential to get worse before it gets better," and that "a wise precaution would be to stand up Covid-style support schemes just in case they're needed."
Further updates on the government's position are expected to follow today's meeting between the Department for Business and Trade and members of JLR's supply chain.
Cost to local communities
Individuals spoke to the BBC this week about the impact JLR's shutdown has had on communities in Solihull and Merseyside, where two of JLR's biggest UK production plants are located.
Locals said small businesses such as sandwich shops, which usually supply entire factories with lunches, are facing financial difficulties as a result of lost revenue while workers remain at home.
Others, like parents of production workers, fear for their children's financial stability, since not only are their normal shifts effectively cancelled, but the better-paid weekend overtime on which so many rely is also unavailable.
Some said their family members still have jobs, such as those who work on the vehicle maintenance side of JLR's operations, but anxiously wait every day for the call that sends them home, because teams are unable to order new parts while computer systems remain down.
Carol, from Old Swan in Liverpool, the wife of a 10-year JLR worker, said: "It's very uncertain what's going to happen; it's a terrible time, to be honest. If my husband does get made redundant, how long will JLR pay the people?
"We keep on getting told dates – the last date was the 24th, but now they're talking about January. Now, we're terrified of spending money; we're just worried about bills and Christmas." ®