Warning “moral danger” after guaranteeing a 1.5 billion pounds of government loan to JLR

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Critics have warned that UK ministers risk created a “moral danger” after giving them a 1.5 billion pounds loan guarantee for Carmaker JLR to support its supply chain after a devastating electronic attack.

Although the guarantee announced on Saturday received a cross -support, both JLR The government is likely to be subjected to severe pressure to explain the terms of the agreement.

The intervention also sheds light on the questions about the adequacy of JLR preparation for an electronic attack and its response to the August 31 incident. It was the manufacturer Unable to resume production Since the attack, the jobs of about 200,000 workers in the company’s supply chain are displayed.

On Sunday, Tom Klosti, Executive Director of the Economic Thinking Institute of the Economic Institute in the Free Market, said the commercial loan acquired by the government was better than other options that were on the table. They included a new proposal for the government to temporarily buy the components of the JLR supply chain and subsequently sell it to the car maker as soon as production resumed.

However, Klustrate said that “greater attention” is that ensuring the loan represents an additional expansion of the government’s role in economic life.

“Will every electronic attack now lead to invitations to save the taxpayers?” He asked. “Will companies be less inclined to secure them against such risks?”

Jimmy McCall, an older research colleague and cyber security expert at the Royal United Institute of Services, warned that companies may now decide that there is no need to produce cybersecurity or invest in security.

“This is the issue of real moral speeches with this,” he said.

Other experts asked why JLR needed to guarantee the UK government to secure a loan from a commercial bank and whether Tata Motors could intervene.

JLR did not buy online insurance, according to people who have knowledge of the situation. He was still in discussions with the insurance broker of Lotkon about whether a Policy would be purchased when the attack was launched.

JLR refused to comment, while Tata Motors did not immediately respond to a request for comment.

Under the export development planning scheme, export financing in the United Kingdom, a government agency, will cover up to 80 percent of the risk of commercial banking loan to JLR.

Any loan covered by the guarantee will come at a low interest rate and must be paid over five years. This should allow JLR to quickly secure additional liquidity to help its suppliers with financial hardship.

Between 60 per cent and 70 percent of FTSE 100 has insurance for the Internet attack, according to Kelly Bater, UK President Cyber ​​for Broker Marsh. But many companies remain skeptical about the amount of the product that will protect them in the event of an attack.

Liam Bernin, head of the Employment Council of the Committee chosen in the House of Commons and Trade, like deputies of all major parties, said that it was the “right thing the government is doing” to provide the guarantee.

“Otherwise, the auto industry will finish work,” he said.

But Bern, whose committee will require the details of the guarantee, also warned of the risk of arrangement.

“Litten by there is a real danger of moral risks,” he said. “As a country, we will have to reshape the way the state and the market work together to try to protect the British industry from these types of risks.”

JLR has not yet signed a loan agreement with a bank, according to a person close to the company.

JLR previously received 500 million pounds as a guarantee for the development of export compared to a loan of 625 million pounds from 12 commercial banks in 2022 to support their transfer to electric cars. According to its latest accounts, the remaining balance of the facility was 219 million pounds.

In July, the United States competitor Ford received a 1 billion pounds export to help financing its electrical transformation.