The UK Government has stepped in to support Jaguar Land Rover (JLR) with a guarantee expected to unlock up to £1.5 billion of commercial bank lending to stabilise its supply chain after a cyber-attack forced production shutdowns, Business Secretary Peter Kyle announced on 28 September.

The loan, sourced from a commercial bank but backed by the Export Development Guarantee (EDG) provided by UK Export Finance (UKEF), will be repaid over five years. It is designed to bolster JLR’s cash reserves so the company can continue supporting suppliers, many of which are small and medium-sized enterprises within the UK automotive sector.

“This cyber-attack was not only an assault on an iconic British brand, but on our automotive sector and the men and women whose livelihoods depend on it,” Mr Kyle said. He added that the loan guarantee would “help support the supply chain and protect skilled jobs” in the West Midlands, Merseyside and across the UK.

Chancellor Rachel Reeves described JLR as “a jewel in the crown of our economy” and said the package would protect “thousands of jobs with up to £1.5 billion in additional private finance”.

With plants in Solihull and Wolverhampton, plus Halewood in Merseyside, JLR directly employs 34,000 people in the UK and oversees the country’s largest automotive supply chain, which accounts for around 120,000 jobs.

Role of the EDG

The Export Development Guarantee is a financial instrument through which UKEF, the UK’s export credit agency, provides a partial guarantee to commercial lenders. Typically covering up to 80% of a bank’s risk on loans to UK exporters, it enables banks to offer working capital or investment finance on terms that might otherwise be unavailable. The Government stressed that this is not direct state lending but a risk-sharing mechanism to unlock private finance.

The EDG can be used across sectors, including clean growth and critical minerals, and is intended to help large exporters sustain or expand their operations. In July, for example, UKEF announced a £1 billion EDG facility for Ford to support its global transformation programme for electrified vehicles.

UKEF’s role

UK Export Finance is the Government’s export credit agency, supporting UK companies selling overseas by providing insurance, guarantees and loans to supplement private sector finance. Through instruments like the EDG, UKEF aims to maintain the UK’s export base and protect domestic supply chains from shocks.

The JLR support follows a ministerial visit to the company’s Gaydon headquarters and one of its key suppliers, sunroof manufacturer Webasto.

JLR hack exposes cyber weakness in UK car industry