The government’s claim to have provided major financial support to Jaguar Land Rover (JLR) has come under scrutiny after it emerged that the carmaker has not drawn down any of a £1.5 billion loan facility guaranteed by the state.
The revelation has sparked anger among suppliers who accused ministers of misleading the public over the extent of their intervention following a devastating cyberattack that forced Britain’s largest carmaker to shut down all of its factories for more than a month.
The attack, which began on 1 September, paralysed JLR’s key computer systems and halted production across its UK operations. The company was only able to restart limited manufacturing in early October and expects full output to resume by early December.
Liam Byrne, chair of parliament’s business select committee, has written to Business Secretary Peter Kyle seeking clarification on whether JLR ever requested to use the funds and whether any of the money has reached suppliers.
Suppliers have privately voiced frustration at the government’s messaging, which appeared to suggest ministers had provided emergency cashflow assistance. One parts executive told The Guardian: “In some ways, the government played a blinder with everyone thinking they bailed out JLR. They did nothing.”
While JLR has launched its own support scheme to pay suppliers upfront, this initiative has been financed entirely from the company’s existing cash reserves, not government-backed credit.
On the eve of the Labour Party conference in late September, Peter Kyle announced that UK Export Finance (UKEF) — the government’s export credit agency — would guarantee up to £1.5 billion in loans to JLR, covering 80 per cent of any potential default.
The package, Kyle said, was designed to “support JLR’s supply chain which has been greatly impacted by the shutdown”. He told delegates days later that he had “announced £1.5 billion support – a huge amount of money to help a hugely important company.”
However, UKEF’s own chief executive reportedly warned ministers that the guarantee was “outside its normal risk appetite”. Multiple industry sources told The Financial Times and The Guardian that JLR only formally signed the loan facility this month — and has yet to draw on it.
The shutdown has caused widespread disruption across the automotive supply chain, which was already under strain from weak demand and thin margins. Many suppliers were forced to lay off staff or halt production to preserve cash.
Most component makers work on 60-day payment terms, meaning the worst of the cashflow impact began hitting this week — two months after JLR’s production stopped.
Stephen Morley, president of the Confederation of British Metalforming (CBM), said while the recovery had been faster than feared, the financial stress for smaller firms remained severe:
“From 1 September, no matter when you get paid, there’s no sales to invoice. Come 1 November, the majority of invoices would have been due. This is a critical pinch point.”
Morley said that while Tier 1 suppliers — those directly contracted to JLR — had received payments, smaller Tier 2 and Tier 3 firms were still struggling to access cash as funds filtered slowly through the supply chain.
A government spokesperson defended its response, saying: “We acted quickly and decisively to put support in place for JLR through a loan guarantee at a critical moment to help the company and its supply chain stabilise the situation.”
Officials added that ministers were “continuing to work closely with JLR, the industry and major banks to monitor the supply chain through this challenging period”.
Despite that reassurance, suppliers say the episode highlights a broader weakness in the UK’s industrial crisis response — with symbolic political gestures outpacing tangible financial relief.
For now, JLR’s unused loan facility stands as a testament to both the company’s financial resilience and the government’s contested narrative of intervention — a reminder that in the wake of Britain’s biggest automotive shutdown in years, support promised and support delivered are not the same thing.
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Government under fire as Jaguar Land Rover leaves £1.5bn state-backed loan untouched after cyber crisis