The Jaguar Bail-Out: An Ask Too Far for UK Taxpayers...?

You may remember that crippling cyber attack that shut down production at Jaguar's car plants for weeks, which lead to serious calls for the government to bail out this large private company.... The result was a £1.5 billion loan guarantee from the government.

This basically means the government has agreed to pay back up to 80% of a loan that Jaguar will take out commercially to cover the costs of this cyber attack.

It was a crushing attack

According to a report by The Times, the hack hit Jaguar's systems so hard that operations ground to a near standstill. Despite this, shares of Tata Motors barely moved a whisker on the Mumbai Stock Exchange in what Patrick Hosking calls a display of "remarkable phlegm" by investors. Recovery, though, is expected to cost around £3 billion and may drag on until late November.

Arguments for the bail out..

Jaguar's response was to lobby the UK government for support, not so much for itself, but for its network of British suppliers who have also since suffered heavy losses due to the production shutdown. On the surface, that might sound reasonable: smaller UK firms, after all, are collateral damage in a crisis not of their making.

The government's response points out that Jaguar directly employs 34 000 people, most of them in the Midlands and Up North, and indirectly firms which employ 120 000 people are negatively impacted.

There's also the 'stand up for this British icon' argument, it is an icon firm, so maybe this is more than merely an attack on industry...?

And Against....

This request risks opening the floodgates. Should taxpayers really be footing the bill for what is, in essence, a corporate cyber failure? When Marks & Spencer suffered a similar incident earlier this year, no bailout came. To treat a luxury carmaker differently, especially one owned by a multinational giant with deep pockets, simply isn't fair.

Moreover, compensating suppliers with public funds could set a perilous precedent. Every future hack might be followed by a line of corporations at the Treasury's door, arguing that their crisis is somehow unique, their need somehow urgent. As Hosking warns, "opening the public purse to the victims of cybercriminals would set a dangerous precedent."

And then there's the 'what about small businesses' argument.... would the government bail-out smaller businesses who have been hacked? I can tell you the answer to that, it's a firm no!

So why should the tax payer bail out a multinational firm which has failed to invest adequately in cyber security...?

Final Thoughts...

I think the thing that prevents me getting in a right rage about this is that it's only a loan-guarantee, there isn't any tax payer money going directly to this company, ONLY if they fail to repay the loan.

So at the end of the day it's a matter of trust! They'd better replace the hacks currently administering their cyber security systems!

Excuse the pun!