The government’s claim to have provided significant financial support to Jaguar Land Rover (JLR) has come under scrutiny after it emerged the carmaker failed to draw on any part of a £1.5bn government-guaranteed credit facility.
The revelation sparked anger from suppliers, who accused ministers of misleading the public about the extent of their intervention after a devastating cyberattack that forced Britain’s biggest car maker to close all of its factories for more than a month.
The attack, which began on September 1, crippled JLR’s key computer systems and halted production at all of its UK offices. The company was only able to resume limited production in early October and expects to resume full production in early December.
Liam Byrne, chairman of Parliament’s business committee, has written to Business Secretary Peter Kyle seeking clarification on whether JLR ever applied to use the funds and whether any of the money reached suppliers.
Suppliers privately expressed frustration at the government’s announcement, which appeared to suggest that ministers had provided emergency liquidity support. A Parts executive told The Guardian: “In a way the government was playing blinders in that everyone thought they had saved JLR. They did nothing.”
While JLR has introduced its own incentive program to prepay suppliers, this initiative has been funded entirely from the company’s existing cash reserves and not from government-backed loans.
On the eve of the Labor Party conference in late September, Peter Kyle announced that UK Export Finance (UKEF) – the government’s export credit agency – would guarantee loans of up to £1.5 billion to JLR, covering 80 percent of any potential default.
The package, Kyle said, was designed to “support JLR’s supply chain, which has been severely impacted by the closure”. Days later he told delegates that he had “announced £1.5bn of support – a huge sum of money to help a hugely important business”.
However, the UKEF chief executive reportedly warned ministers that the guarantee was “outside their normal risk appetite”. Multiple industry sources told the Financial Times and the Guardian that JLR only formally signed the credit facility this month – and has not yet drawn on it.
The shutdown has caused widespread disruption across the automotive supply chain, which was already under pressure from weak demand and thin margins. Many suppliers were forced to lay off staff or stop production to save money.
Most component makers operate on 60-day payment terms, meaning the worst impact on cash flow was felt this week – two months after JLR stopped production.
Stephen Morley, president of the Confederation of British Metalforming (CBM), said that while the recovery was quicker than feared, the financial burden on smaller businesses remained severe:
“As of September 1st, sales no longer need to be invoiced, regardless of when you get paid. As of November 1st, most invoices would have been due. This is a critical point.”
Morley said that while Tier 1 suppliers – those contracted directly to JLR – had received payments, smaller Tier 2 and Tier 3 companies were still struggling to access cash as funds flowed slowly through the supply chain.
A government spokesman defended its response, saying: “We acted quickly and decisively to support JLR at a critical moment through a credit guarantee and to help the company and its supply chain stabilize the situation.”
Officials added that ministers “continue to work closely with JLR, industry and major banks to monitor the supply chain during this challenging time.”
Despite this reassurance, suppliers say the episode highlights a broader weakness in the UK’s response to the industrial crisis – with symbolic political gestures outweighing concrete financial relief.
For now, JLR’s unused credit facility is evidence of both the company’s financial resilience and the government’s controversial intervention narrative – a reminder that support promised and delivered are not the same after the UK’s biggest car shutdown in years.
