To ask the Minister of State, Department for Business, Enterprise and Regulatory Reform what his policy is on its payment of wage contributions to workers in the automotive industry on short-time working who are undertaking retraining in their own time. (275131)

The Government fully appreciate the difficulties that the automotive industry is experiencing during the current economic downturn.

While we are supporting a range of automotive support initiatives, we do not believe that introducing a general wage subsidy for all employers is a feasible, cost effective and sustainable option for the UK. Past experience in the UK when running a wage subsidy programme in the 1970s was that wage subsidies acted to create distortions and perverse incentives for other sectors and companies to bargain for subsidies.

We believe that the future success of British industry will be based on a highly skilled workforce, and where production is being reduced we are helping business train their workforces to ensure they emerge from the economic downturn in the best possible shape to compete in the future.

Automotive companies can access funding for training from Government and the Sector Skills Council for Science, Engineering and Manufacturing Technologies. Following demand from the automotive industry for this support, funding under the “Train To Gain” scheme for the sector has been increased substantially up to £100 million from the original budget of £65 million.