The Bank of England has denied it is to blame
for delays to a scheme to give liquidity assistance to car finance
firms.
The denial comes after business secretary Lord
Mandelson implied the Bank of England and HM Treasury were to blame
for the lack of progress on announcing and implementing a scheme to
give financial liquidity assistance to car finance companies.

Mandelson told the BBC: “I wish that our
discussions with the Treasury and the Bank of England[…] had gone
quicker than they have.

“But the discussions are nonetheless making
progress and I hope it will be possible for us to help those car
financing arms, because that goes hand in hand with our other
efforts to boost this market.”

He made his comments after a motor industry
‘summit’ to discuss state support for manufacturers and finance
companies.

Following the meeting, Sue Robinson, director of
the Retail Motor Industry Federation’s National Franchised Dealers
Association, said she was disappointed by the outcome of the
summit.

“Today’s Business, Enterprise and Regulatory Reform
seminar on the automotive industry failed to address the issues
facing the retail motor industry,” Robinson said.

She said a scrappage scheme was urgently needed,
and that “[other] measures that could provide support for the
industry also need to be considered”.

A Bank of England’s statement said it was “puzzled”
by Mandelson’s comments, and added: “It is not the role of the Bank
to provide sector-specific support. That is clearly and properly a
matter for the government.”

Shadow business secretary Ken Clarke said, in his
view, it was not the Treasury or the Bank of England which was
holding up the process of giving a liquidity boost to car finance
companies, but “Alistair [Darling]” who was the real obstacle to
progress.

Clarke said support for car finance providers had
been advocated by the Conservatives “for a long time now”, as “the
car finance companies, like everyone else, are finding it difficult
to raise the money to offer credit”. He said the government should
“guarantee part of the loans” for car financiers – as it is doing
for the banks.