British officials are looking at a model of state support used by the Thatcher government 40 years ago to support prominent UK businesses thrown into crisis by the coronavirus lockdown.
As Jaguar Land Rover Group (JLG) became the latest company to confirm it was in talks with officials over a rescue plan, consideration was being given to a new bailout vehicle that would offer convertible loans or take preferred equity in troubled national firms.
The approach was used during the economic downturn of the 1970s and 1980s and led to the wave of privatisation that cemented former prime minister Margaret Thatcher's reputation as a champion of capitalism.
Troubles at JLG are partly long-term and structural. Despite the successful launch of new electric models, the carmaker remains dependent on diesel engine vehicles for the bulk of its sales.
The company employs 38,000 staff in Britain and has used state support to furlough 18,000 members of its workforce.
Jim O'Neill, a former Goldman Sachs Asset Management chairman and government minister, told the Financial Times that £25 billion (Dh111bn) could be set aside for a new body to invest in inherently stable businesses.
"You convert into preferred equity on the assumption that some of these companies have a good future and then flog them – à la Margaret Thatcher," he said.
Philip Booth, an economist with the Institute of Economic Affairs, said the government would face the loss of all its investment if the business ended up going bust. However equity states would give the state much more control over parts of the economy, allowing bureaucrats to direct economic activity.
Other businesses in the industrial base that may need to tap support, include the airline engine-maker Rolls-Royce, aerospace firms and steel manufacturers. Airlines including Virgin Atlantic could be included in the scheme, which has been called Project Birch.
JLG rival Aston Martin has reacted to a collapse in sales with a management shake-up. Chief executive Andy Palmer, who led the launch of the DBX, a $189,000 (Dh700,000) SUV, is reportedly set to be replaced by Tobias Moers, the head of Daimler's Mercedes-AMG performance division. Mr Moers has an industry background in electric vehicles.
Preliminary figures from the industry group TheCityUK estimated earlier this month that unsustainable debt among British businesses was as high as £105bn before the crisis. It said the need for extra funding would grow through the shutdown.
"Faced with falling revenue and additional debt, business will require full-scale recapitalisation to alleviate the hit to employment and to sustain the investment required to put the economy back on its feet," the group said in a note to the Bank of England.
BoE governor Andrew Bailey has indicated the bank needs to go much further to embrace unorthodox policies to pull out of the Covid-19 slump. This could also include negative interest rates, for which he said he had changed his position "quite a bit".
Mr O'Neill, who is now chairman of the think tank Chatham House, has called for radical thinking, including the relief of student-incurred debt to refloat the economy after the downturn.
With both the government and the central bank talking up interventionist measures, the pound has come under pressure on foreign exchanges. Sterling was trading down, below 1.22 against the US dollar on Monday.