Trade union leaders were yesterday impotent in the face of threatened mass sackings at Jaguar Land Rover (JLR) and Corus by owner Tata of India.
Unite leaders Simpson and Woodley have urged Brown to urgently come up with aid for the car industry but proposed no action by the union and have refused to call for the nationalisation of the group.
Steelworkers union Community has said it is braced for ‘significant job cuts’ in the new year.
Tata has warned the Brown government that it may be forced to axe thousands of jobs within months unless it receives emergency state aid.
Jaguar Land Rover (JLR) chief executive David Smith has told officials from Mandelson’s Department of Business, Enterprise and Regulatory Reform (BERR) that JLR will have no choice but to cut ‘certainly hundreds and probably thousands’ more jobs.
The company has already axed 2,000 posts since its takeover by Tata Motors earlier this year.
Mandelson has assembled a team from City accounting firm KPMG and investment bank NM Rothschild, to advise him on the increasingly desperate situation at JLR, which has demanded a £600m rescue package.
Corus bosses have already been in talks with the government to pay 70 per cent of laid-off workers’ wages and the company has threatened mass sackings if the government does not cough up soon.
Mandelson warned at the weekend that the state would only be ‘a lender of last resort’.
Indicating Tata should get a loan elsewhere, he said the Indian owners of Corus and JLR ‘must look to their own resources’.
He said the government ‘cannot be first call in these circumstances’, and that any aid would mean both companies meeting and passing ‘some pretty tough tests’.
All Trades Unions Alliance national secretary, Dave Wiltshire, told News Line yesterday: ‘This mammoth multi-national, Tata, is bust.
‘Far from being the saviour of the British motor industry, as it was hailed when when it took over Jaguar Land Rover, it can’t afford to keep Corus and the car plants open.
‘It is now arrogantly demanding taxpayers’ money, or it will pull out with the loss of tens of thousands of jobs.
‘This can only be answered in one way – an occupation to keep car plants and steelworks open, and national strike action to secure their nationalisation.
‘The trade union leaders must immediately organise such action or resign and make way for leaders who will.’
• Second news story
LABOUR STAMPS ON THE POOR
The Brown government yesterday came under fire over plans that would see the poorest charged extortionate rates of interest for emergency state loans.
A Department for Work and Pensions consultation document proposes changes to the social fund that currently extends £500m a year in interest-free loans to some 1.2 million benefit claimants, many of them elderly or disabled.
The document, signed by Work and Pensions Secretary James Purnell, stated that the government was considering offering contracts to credit unions ‘to take over the provision of credit to social fund customers in their areas’.
The paper stated that the monthly one to two per cent rate charged by credit unions added up to an annual rate of between 12.68% and 26.8%.
Speaking on the Andrew Marr Show yesterday former Labour leader, Kinnock said there was ‘no justice’ in the plan.
He said: ‘I don’t know where the idea of imposing any form of interest on repayments of social fund loans comes from, but I know where it’s going to, and that is absolutely nowhere.’
Chairman of the House of Commons Treasury Select Committee, Labour MP John McFall, said: ‘The government needs to ensure that people get genuine loans and their genuine needs are met.
‘To put a 26.9 per cent interest rate on that seems to me that it would make a bad situation even worse, so I think that’s a bit of a joke.’