Another week, another clumsy intervention from ministers who seem incapable of learning the hard lessons of economic history. The £1.5bn loan guarantee to Jaguar Land Rover (JLR) after a cyber-attack is being trumpeted as ‘decisive action to protect jobs’. In reality, it reeks of the same inexperienced judgment that turned the 2008 banking bailout into a decade-long hangover.
The unavoidable fact is, cyber-attacks are now part of doing business. Firms that fail to build resilience, diversify supply chains or insure against disruption (JLR were looking at this) have no excuse. That is the discipline of capitalism and choosing to function in a digital economy. Yet ministers have decided to socialise JLR’s risk while leaving the upside firmly in private hands.
The message being signalled is dangerous. If you are big enough and politically noisy enough, the government will underwrite your mistakes. If you are a smaller firm, tougher luck. This is not free-market Britain; it is corporatism by stealth.
In this case, the corporatism is compounded by a glaring conflict of interest. JLR, under Tata ownership, was effectively steered into signing its critical IT outsourcing with Tata Consultancy Services (TCS), a Tata sister company. Did this have the good governance of an open tender for resilience or was good governance overridden to kept in the family? TCS is Afterall a supplier with a questionable track record managing the very systems that failed being linked to the high-profile breaches at Marks & Spencer and the Co-op, both damaging incidents that raised eyebrows across the industry. Once is forgivable, twice is careless, but three times? That starts to look like systemic failure. a pattern any judicious underwriter should be questioning, did any government Minister even consider this? With JLR, it is getting hard to call it anything but systemic negligence. Yet instead of holding Tata to account, the government has chosen to underwrite the fallout with public guarantees.
This is not unfamiliar territory, the public has had to pay for negligent decision making like this before. In 2008, banks were ‘too big to fail’, so taxpayers paid the bill. Today it’s carmakers; tomorrow it will be whoever shouts loudest. Capitalism without failure is not capitalism at all, it is cronyism dressed up as prudence.
Government does have a role in cyber resilience and it should stay in its lane, setting standards, ensuring insurance markets function and helping the small medium enterprise heart of UK Plc prepare. Underwriting blank cheques for giants like JLR is the worst of all worlds, it encourages recklessness, penalises prudence and expands the state far beyond its proper boundaries.
The real lesson from JLR’s bailout is this, corporate boards should be held to account for their decisions (and lack of timely action) and ministers who are still too quick to confuse headlines with strategy need to educate themselves and stay in their lanes. Britain cannot afford yet another round of naïve state intervention. If every boardroom now believes Whitehall will ride to the rescue, then the only growth industry left will be lobbying … perhaps ministers should declare that our new national sport.
The worry is that ministers clearly are feeling embolden that they has cracked the code of modern economics … privatise the profit, socialise the failure and call it leadership. At this rate, the Treasury may as well install revolving doors, one side for failing boardrooms, the other for taxpayers footing the bill.
Posted on September 28, 2025
0