The British car industry is desperately pressing for assistance in the Budget on April 22.

Industry leaders say that it needs help in three areas: a scrappage incentive scheme, access to cash for the car companies’ consumer finance arms and help to pay the wages of employees on short-time working.

Frustrated executives say that they have been warning for months that urgent Government help is needed. But so far Britain has been slow to react compared with other leading European countries, they claim — so slow that Lord Jones of Birmingham, the former Trade Minister and Director-General of the CBI, will join a union protest march next month after condemning the Government’s action as pathetic.

So far ministers have set aside £2.3 billion in loans, the first round of which was awarded this week. But there has been no movement on the other key planks being sought by the Society of Motor Manufacturers and Traders.

The society said that car sales for last month illustrate how Britain is disadvantaged compared with its neighbours. In those countries with scrappage schemes, the market in Germany has jumped by 40 per cent; in France it has improved by 8 per cent; in Italy the decline has been reversed to show a growth of just under 0.5 per cent; and in Spain the dire drop of 48 per cent in February became a fall of 38 per cent last month.

The British market fell 30 per cent last month after declining by 21 per cent in February. Lord Jones and Unite, the biggest union, have warned that protecting the car industry is essential because, if the supply base begins to shrink too much, Britain’s industrial capability will be damaged and with it the ability to attract future investment.

Lord Mandelson, the Business Secretary, has shared the industry’s frustration. He recently sparked a showdown with the Bank of England when he blamed the Bank and the Treasury for the hold-up in help for carmakers.

All the car industry is now on short-time working with many companies having imposed protracted shutdowns to try to reduce stocks. Honda is on a four-month shutdown at its Swindon plant and other divisions, such as BMW’s Mini operation in Oxford, closed for a month in December.

Some companies face particularly urgent problems. The scramble of General Motors to try to stay in business in the US has heightened fears over the future of Vauxhall in Britain.

Scrapheap challenge

— Japan is the latest country to embrace a scrappage scheme. It offers 15.4 trillion yen (£100 billion) in incentives to buy new cars and white consumer goods such as washing machines and fridges

— The US Government is considering “cash for clunkers”

— In Western Europe most countries, except Britain, have scrappage plans, offering €1,000 to €2,500 for old vehicles and buying new ones

— Funding for Germany's scrappage programme has risen from €1.5 billion to €5 billion

— Deloitte has estimated that one in ten new cars in Poland are now bought by Germans, with the scheme not stipulating that cars must be from the home market

— France saw a rise of 8 per cent in its car market last month. Its scheme offers €1,000 to €2,000 for cars more than ten years old

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