'Ambitious' manufacturing investment schemes urged by new report

The Government is being urged to invest in the manufacturing sector to avoid losing vital work to overseas rivals.

Think tank Civitas warns that a lack of cash injections in industries like aerospace will mean that China, Japan and Brazil will become the locations of choice for jobs in such sectors.

Policies seen in the 1950s following the fallout of the Second World War have been suggested as one method to drive the sector forward, such as investments in new small-scale aircraft, and a public finance scheme for automotive suppliers.

Report author Kaveh Pourvand wrote: "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 went on: "The reason we have a successful car and aerospace industry today is that previous governments were proactive in shaping a comparative advantage for Britain in these sectors. This was especially true of Margaret Thatcher.

"What is required now is a similar ethos, not of 'big' or 'all-knowing' government but bold government, prepared to take the steps necessary today to ensure economic success tomorrow."

In a bid to keep up and remain dominant in areas such as defence, Britain needs ambitious investment in new products and technologies, the report suggests.

Mr Pourvand added: "China in particular has invested heavily in its aerospace industry.

"The danger is that greater competition from abroad combined with less defence spending at home will eventually lead to aerospace jobs and production going overseas.

"Once lost, these are very difficult if not impossible to re-establish."

He also pointed out that improvements to the domestic supply chain for the automotive industry would strengthen ties with the many foreign-owned firms which dominate the sector and balance out higher-value activities at home and abroad.

Copyright Press Association 2013