UK Government Backs £1.5bn Loan Guarantee to Support JLR After Cyber-Attack Shutdown

The UK government has announced a £1.5 billion loan guarantee for Jaguar Land Rover (JLR) as the carmaker grapples with a cyber-attack that has brought its UK production to a standstill.

Business Secretary Peter Kyle confirmed that the support package, facilitated through the Export Development Guarantee (EDG) scheme, is aimed at safeguarding thousands of jobs and protecting the wider supply chain, which includes hundreds of small businesses.

The cyber-attack, which struck on 31 August, forced JLR to halt production across its UK plants in Solihull, Wolverhampton, and Halewood, where around 30,000 people are directly employed. An estimated 100,000 additional jobs are tied to the company’s extensive network of 700 suppliers, some of which rely exclusively on JLR for business.

“This is a big moment,” Kyle said. “The £1.5bn credit facility will provide vital resources for JLR and its supply chain to navigate the immediate challenges they face and protect jobs in the West Midlands, Merseyside, and across the UK.”

The funding will come from a commercial bank, with the government acting as guarantor. JLR will repay the loan over five years, using the funds to clear a backlog of supplier payments and restore financial stability while production remains suspended.

Mounting Pressure on Suppliers

The shutdown has raised fears of a potential collapse among smaller suppliers, with some warning they have less than a week of cash reserves left. Production is not expected to resume before 1 October, with losses for JLR estimated at £50 million per week.

JLR has stopped placing new orders with suppliers while its factories remain offline. A parliamentary committee had urged the government to act quickly to prevent the crisis from deepening.

Chancellor Rachel Reeves described the loan guarantee as a decisive intervention to protect a critical part of Britain’s automotive sector.
“Today we are protecting thousands of jobs by securing up to £1.5bn in private finance, ensuring stability for the supply chain and safeguarding one of the cornerstones of our car industry,” she said.

Political and Industry Reactions

While the government’s move was widely welcomed, critics said the response had come too late.
Shadow business secretary Andrew Griffith called for the creation of a cyber reinsurance scheme to shield businesses from attacks by state-backed hacking groups, while Liberal Democrat spokesperson Sarah Olney urged ministers to consider a furlough scheme for workers if the disruption continues.

Local MPs expressed cautious optimism. Labour MP Sarah Coombes said the support would help protect “thousands of jobs in the Black Country,” while Conservative MP Saqib Bhatti acknowledged the necessity of the intervention but criticised the government’s speed, saying:
“Do I think the government moved too slowly? 100%. They need to learn from this and be more nimble.”

Union Unite, which represents thousands of JLR workers and supply chain staff, described the loan guarantee as an “important first step.”
“The money must now be used to secure job guarantees, protect skills, and safeguard pay across JLR and its supply chain,” said general secretary Sharon Graham.

The Cyber-Attack

The cyber-attack was claimed by a group calling itself Scattered Lapsus$ Hunters, which has been linked to earlier attacks on Marks & Spencer and Co-op.

Since 1 September, JLR employees have been instructed to remain at home while cybersecurity teams, law enforcement, and the National Cyber Security Centre (NCSC) work to restore systems.

In a statement, JLR said:
“Our teams continue to work around the clock alongside cybersecurity specialists, the NCSC, and law enforcement to ensure we restart in a safe and secure manner. The foundational work of our recovery programme is firmly under way.”

The company, owned by India’s Tata Motors, usually produces around 1,000 vehicles daily across its three UK plants. The prolonged disruption has sparked fears about long-term damage to the UK automotive sector, which is already battling international competition and economic uncertainty.