West Midlands Mayor Andy Street has said the British government should provide state aid for firms such as Jaguar Land Rover after Brexit.
State aid could mean the government allowing the firm to pay lower taxes – or simply giving it cash to keep it afloat.
It comes after the carmaker, which employs thousands of people in Birmingham and Solihull, announced it was axing 4,500 jobs worldwide and invited British employees to apply for voluntary redundancy.
Mr Street, a Conservative, said the Government “should rapidly look at whether State Aid regulation can be altered to enable them to directly support our industries of the future, vital for companies such as Jaguar Land Rover.”
State aid is when a Government helps a business. It often means financial aid, such as allowing the business to pay lower taxes than normal, or giving it financial aid.
It can also mean providing indirect help, such as awarding a firm contracts to provide goods or services to the public sector. However, Mr Street appeared to be calling for a more direct form of support.
EU rules currently prevent state aid, but it may become possible for the UK government to provide more help to businesses after Brexit.
The mayor made the comments in an article for website ConservativeHome.
Although he talked about what should happen after a Brexit deal is approved by MPs – something the mayor strongly supports – he is also known to be deeply worried about the future of Jaguar Land Rover if the UK opts for a “no-deal” Brexit.
A no-deal Brexit would mean leaving the EU without any trading arrangements in place. It would increase costs for carmakers in the UK and could make it harder for them to obtain components from suppliers in EU countries.
Mr Street said in the article: “With a deal settled, we need to demonstrate Conservative leadership to boost business, create jobs, and grow the economy.
“There needs to be tangible support for the Government’s policy of Local Industrial Strategies – which the West Midlands has pioneered – to grow regional productivity.
“That means investment in skills and training, and infrastructure to help business.
“In some cases, this could mean direct support. Government should rapidly look at whether State Aid regulation can be altered to enable them to directly support our industries of the future, vital for companies such as Jaguar Land Rover.
“Business rates on the High Street need to be looked at again, too. Retailers and traders welcomed the tax announcements in the Budget, but after a Christmas that has confirmed long-term trends these need to go further.
“Across all sectors of business, tax cuts will incentivise capital investment to increase productivity.”