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£2.3b package for motor industry

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The Government has announced a £2.3 billion support package for the country`s struggling motor industry.

Business Secretary Lord Mandelson will meet motor bosses and unions to discuss how the cash will be used to help stem increasing job losses and provide loan guarantees to companies suffering a huge slump in sales.

The recession has meant motorists are watching what they spend and have put off buying new vehicles so they can ensure they have enough money to pay for essentials such as car insurance and road tax.

The measures are designed to give manufacturers a boost but should not be seen as a bail-out, according to Lord Mandelson.

However, it appears some interest groups are disappointed with the package, with the joint leader of the biggest trade union describing the announcement as a "massive disappointment", while one motor firm rated the measures "six out of 10".

Loans of up to £1.3 billion from the European Investment Bank will be offered by the Government, as well as support guarantees of up to another £1 billion for lending and loans.

Unite had called for around £13 billion of help for manufacturing, including car companies.

Increased funding for training of car workers as well as moves to "reinvent" the industry for a greener, low-carbon future were also announced.

© Press Association 2009