Government must intervene to save UK manufacturing jobs, says Civitas

Think-tank Civitas proposes a public finance scheme to support domestic suppliers to the automotive industry and major investment in innovative new technologies that the private sector is unwilling to get involved in. The aerospace and automotive sectors – "the two main surviving success stories of UK manufacturing" – face enormous pressures from global competition over the coming decades, according to Civitas. Civitas said: "Without a return to the kind of activist industrial policy that enabled them to flourish in the second half of the 20th Century, jobs and production lines will be lost to countries like China, Japan and Brazil whose governments are prepared to invest heavily in sectoral development." The report's author, Kaveh Pourvand, said: "The coalition could and should be more ambitious in its industrial policy. It has proposed industrial strategies for both the aerospace and automotive sectors. However, the scale of these interventions is limited, focusing on resolving narrowly defined 'market failures'." He added: "The truth is that private dynamism does not occur in a vacuum. All successful markets are in part a product of robust government action. Governments have to get involved in industrial policy whether they like to or not." In a paper called "Picking winners: How UK industrial policy ensured the success of the aerospace and automobile industries", Pourvand proposes two government interventions: • A public finance scheme for automotive suppliers • Major investment in new technologies He said: "Shortage of finance is a key problem holding back automotive suppliers, but the government's strategy document for the sector lacks any substantive proposals to remedy this problem."