Government steps in with £1.5bn loan guarantee to save JLR supply chain
In an unprecedented move to shield Britain’s iconic automotive industry from the fallout of a major cyber-attack, the UK government has announced a £1.5 billion loan guarantee for Jaguar Land Rover (JLR). Underwriting this commercial bank loan through the Export Development Guarantee (EDG) scheme, Business Secretary Peter Kyle aims to protect thousands of supplier jobs and stabilise production as sites remain offline.
Cyber-attack brings production to a halt
At the end of August, JLR’s UK production lines ground to a standstill following a sophisticated hack. Plant operations have been suspended for weeks, with a tentative restart now pencilled in for 1 October at the earliest. During this shutdown, JLR halted orders from its network of 700 suppliers, leaving many smaller firms with barely a week of cash to cover wages and overheads.
The Society of Motor Manufacturers and Traders (SMMT) reports that around a quarter of these suppliers have already paused work or laid off staff. For JLR itself, the stoppage is thought to be costing at least £50 million per week in lost output and compensation to dealers and customers.
£1.5bn guarantee to protect jobs
The new loan guarantee will underwrite credit extended to JLR, allowing the manufacturer to shore up its cash reserves and clear a growing backlog of payments due to its supply chain. Rather than a direct bailout, the EDG facility offers reassurance to lenders and suppliers that the government stands behind this funding, reducing borrowing costs and ensuring continuity of parts supply.
- Scope: £1.5 billion guaranteed by government fund
- Repayment: Structured over five years to ease short-term pressure
- Purpose: Bridge the gap in supplier payments until production resumes
Economic ripple effects across the UK
JLR is a major employer, with approximately 30 000 staff at its UK plants and 100 000 roles in the wider supply network, particularly in the West Midlands and Merseyside. Peter Kyle emphasised the broader impact, stating: “This cyber attack was not only an assault on an iconic British brand, but on our world-leading automotive sector and the men and women whose livelihoods depend on it. Following our decisive action, this loan guarantee will help support the supply chain and protect skilled jobs.”
The minister also hinted at further “energetic and creative” measures being explored to save imperilled firms in the wake of the attack.
Industry and political reactions
Chancellor Rachel Reeves welcomed the intervention, noting: “Jaguar Land Rover is an iconic British company which employs tens of thousands of people. We are protecting thousands of these jobs… helping support their supply chain and protect a vital part of the British car industry.”
However, Shadow Business Secretary Andrew Griffith criticised the delay: “It took too long to get here,” he said. Griffith urged the government to adopt a proposed cyber reinsurance scheme to shield all British businesses from state-backed actors in an increasingly hostile digital landscape.
Unite the Union, representing thousands of workers at JLR and its suppliers, described the guarantee as an “important first step,” while calling for continued support to prevent further job losses.
Government support via EDG scheme
The loan guarantee will be delivered under the EDG, a mechanism designed to help UK exporters secure finance. By underwriting a commercial bank loan, the scheme provides JLR with immediate liquidity, ensuring payments to suppliers can restart even before production resumes in full.
- EDG Purpose: Aid UK companies exporting goods or services overseas
- Implementation: Underwriting a private-sector loan, not a direct grant
- Benefit: Maintains supplier confidence and cash flow during the shutdown
Ongoing recovery and security measures
JLR’s internal teams, alongside cybersecurity specialists from the National Cyber Security Centre and law enforcement agencies, continue to work around the clock. A company spokesperson confirmed: “Our teams continue to work around the clock alongside cybersecurity specialists, the NCSC and law enforcement to ensure we restart in a safe and secure manner. The foundational work of our recovery programme is firmly under way, and we will continue to provide regular updates to our colleagues, retailers and suppliers.”
While the £1.5 billion guarantee offers immediate relief, JLR and the government must navigate the complex task of restoring digital defences and rebuilding trust across the automotive ecosystem. As production inches closer to resumption, all eyes will be on JLR’s ability to deliver on its recovery timeline and on ministers to avoid further economic fallout.
