Mandelson softens stance on wage top-ups for car workers

The government may top-up the cash of car workers who have had their hours reduced in the downturn.

Earlier this week unions and manufacturers urged the government to supplement the pay of staff who have been asked to work shorter hours as demand slows.

Despite ignoring the issue in parliament on Wednesday, business secretary Peter Mandelson has now confirmed the government may offer car manufacturers an “operating subsidy” to help prop up wages.

Mandelson revealed the plans at a motor summit yesterday, but details of how much or when this could occur have not yet materialised. However he said firms had to present “fully costed proposals” on how it could work.

A spokeswoman from super-union Unite told Personnel Today earlier this week: “We are looking to [the government] contributing to the cost of making up people’s wages when they work reduced hours.”

The deal requested was part of a broader call for a strategic aid package for the manufacturing sector.

“We have asked for a strategic fund for manufacturing of £13bn, based on what the German government announced in October last year,” she said.

“This will support companies on a commercial loan basis and allow assorted investment in machines, training and re-working lines to make them more environmentally sound.”

Meanwhile, Mandelson increased funding for the Train to Gain scheme for the car industry to £100m.