Engagements

Part of Oral Answers to Questions — Prime Minister – in the House of Commons at 11:30 am on 14th January 2009.

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Photo of Gordon Brown Gordon Brown The Prime Minister, Leader of the Labour Party 11:30 am, 14th January 2009

My hon. Friend—who is the Member of Parliament for South Swindon—is absolutely right. Two issues face the car industry at the moment. One is a shortage— [Interruption.] Opposition Members laugh when we talk about the car industry. The first issue is a shortage of demand for cars; the second is the availability of credit for people buying cars. We have been talking to the various car companies and we will make announcements in due course, but those two problems must be dealt with. In terms of the car credit problem, which relates to loans for car purchase, this is basically a market that is outside the traditional banking industry, and we must look at what we can do to prevent it from freezing in the way other markets have. This is a detailed and technical question about how we can get help into the car loan industry, but we are looking at it very carefully.

Some firms in the car industry have already asked us about help with training skilled workers so that they can rebuild, and build, their skills during the period of downturn, and we are also prepared to provide that. In other words, we will do what we can to help.

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David Clark
Posted on 15 Jan 2009 3:07 pm (Report this annotation)

Surely Mr Brown's logic is wrong. There is one issue - the shortage of demand for cars. This is caused by a number of factors, one is the availability of credit for car purchasers, another is the fact that people are put off buying cars because they have no job or fear redundancy etc. I worry that the PM and ex-chancellor has made such a fundamental mistake in his logic. Also I note many are worried that the Government appears to be encouraging individuals to get deeper into debt when this contributed to the problem in the first place.

Ian Simcox
Posted on 16 Jan 2009 9:50 am (Report this annotation)

Absolutely correct David. Rather than a switch in the mindset from 'buy now, pay later' to 'save now, buy later' he is actively attempting to encourage a return to the debt fuelled days of 6x salary 125%mortgages. He doesn't appear to accept that the bubble has burst and that instead of trying to return to the past he should be looking at how he can produce stability in the future.