The guarantee will be provided under the Automotive Assistance Programme, which is designed to administer the £1bn of loan guarantees and loans from the UK government to the automotive sector, as well as £1.3bn of loan guarantees supporting European Investment Bank (EIB) lending.
The British loan guarantee will be provided alongside extra support from GM in the US and support from other European governments.
‘We need Vauxhall to thrive as part of Britain’s automotive manufacturing base and, following our negotiations with GM Europe, I am confident it will do so,’ said Lord Mandelson.
According to a statement, discussions will continue with GM and other European governments to finalise the remaining details of funding terms and arrangements enabling the implementation of the business plan.
‘This announcement is great news for British industry,’ said Tony Woodley, Unite joint general secretary. ‘The loan will help save thousands of jobs in Vauxhall’s operations and in the 400 companies in its supply chain.
‘Nothing could illustrate more clearly the difference between Labour’s proactive approach to helping manufacturing and the short-sighted do-nothing attitude of the Tories,’ he added. ’With Cameron and Osborne in Downing Street, these jobs would be lost.’