What the government decision means
The UK government has agreed to underwrite a £1.5bn loan guarantee to Jaguar Land Rover (JLR) through the Export Development Guarantee (EDG) scheme. The move is aimed at stabilising the carmaker’s sprawling UK supply chain and protecting thousands of skilled jobs as the company continues to recover from a cyberattack that halted production at the end of August.
Produced as a five-year loan paid back by JLR to bolster its cash reserves, the scheme is designed to bridge the gap between halted orders and the ongoing costs of maintaining suppliers who form the backbone of the UK automotive sector. EDG-backed lending is specifically intended to assist British exporters and companies that rely on overseas trade, but the government has positioned this guarantee as a shield for domestic suppliers affected by the shutdown.
The mechanism and purpose
Under the plan, the government will underwrite the loan via a commercial bank, with JLR repaying the debt over five years. The aim is to provide some certainty to the company’s 700 suppliers and the wider network that keeps the UK’s largest automotive supply chain ticking. JLR’s disruption has left many small suppliers with limited cash runway, and the EDG guarantee is intended to prevent a cascade of insolvencies while the cyber recovery continues.
Why suppliers are at risk
The stoppage is creating a backlog of payments and a fragile cash position across the supply chain. A parliamentary committee reported that several small suppliers warned they could exhaust cash within a week if production did not resume promptly. The halt is estimated to be costing JLR itself at least £50m per week, underscoring how critical swift steps are to preserve production capacity in the UK.
Regional and national impact
JLR operates the country’s largest automotive supply chain, employing roughly 150,000 people in total. The production sites—Solihull and Wolverhampton in the West Midlands and Halewood in Merseyside—support significant regional economies. In the government’s framing, protecting those jobs also protects livelihoods across a network of suppliers and service firms that rely on regular manufacturing payrolls.
Political and union reaction
Business Secretary Peter Kyle welcomed the guarantee, saying it would help safeguard the supply chain and skilled jobs across the UK. Chancellor Rachel Reeves echoed the sentiment, noting that the plan protects thousands of jobs with access to up to £1.5bn in private finance to support the supply chain and the broader car industry. Opposition and union voices largely supported the move but criticized the timeline, urging additional protections such as a cyber reinsurance scheme or furlough-like support if needed. Unite general secretary Sharon Graham described the funding as an important first step and urged safeguards for jobs, skills, and pay throughout JLR and its suppliers.
The road ahead for JLR and its suppliers
JLR has said it is working with cybersecurity specialists, the National Cyber Security Centre (NCSC), and law enforcement to restore operations safely. With around 30,000 people directly employed at its plants in the UK, the company is counting on the loan guarantee to stabilise operations and allow the recovery program to proceed without devastating knock-on effects for suppliers that are already financially stressed.
What this means for the UK automotive sector
The government’s intervention signals a broader commitment to safeguarding critical manufacturing sectors from disruptive cyber threats. While the EDG-backed loan primarily supports JLR’s immediate needs, its spillover effect aims to preserve a robust UK auto industry, maintain skilled employment, and protect a large, interconnected supply chain during a period of heightened cyber risk.
