Mandelson hints at Vauxhall loans

Lord Mandelson was visiting the IBC van factory, which is owned by Vauxhall

The UK is prepared to make loans or loan guarantees to help push through the sale of Vauxhall, Business Secretary Lord Mandelson has said.

Vauxhall is owned by General Motors (GM) Europe, which is in talks to be taken over by Magna, a car parts maker.

"We would obviously have to have interest paid and some security," he said. "This is taxpayers' money we are dealing with, and a lot of it."

Lord Mandelson refused to say how much these loans could be for.

Long-term plans?

Vauxhall assembles vans in Luton and cars in Ellesmere Port.

Any takeover of GM Europe, whose main business is the German-based Opel brand, is expected to be backed by 3bn euros (£2.5bn) in European state guarantees.

"I believe that Luton should be, and will be, part of Magna's long-term plans, but it's not a done deal," he said.

The takeover of GM Europe comes after its US parent, the iconic American carmaker, General Motors, filed for bankruptcy.