From the ashes of LDV…
The news is coming through that WestStar, the purported buyer of LDV vans is dropping out of the deal – putting at risk up to 2,000 jobs.
I think this is a test of the Government’s committee to industrial policy, especially in light of equally uncertain news at Vauxhall.
As I wrote this week on LabourList:
What would an industrial policy look like? It would not be a rerun of the 1970s, I am not advocating ‘picking winners’ and backing individual companies. Nor would it be about subsidising specific firms that have no future. Whilst I don’t want any more British Leylands, I wouldn’t mind the odd Chrysler. Equally it should not be an excuse for a return to protectionism.
I am certainly not arguing that we need to draw up a ‘National Plan’ as detailed as the Wilson Government’s document of 1965 that asked each industry how much timber it would need in coming year. Instead we need more of a ‘National Blueprint’, some outline of where we want the economy to be. I’d suggest concentrate on our strengths and industries where there is a long-term future – pharmaceuticals, advanced manufacturing, green technology, telecoms & communications, biotechnology, renewables, green engineering. In each case we could then support the industry through large R&D tax credits, direct tax breaks, government funded venture capital schemes, government backed lending schemes, extensive training grants, direct support of university and FE courses to train future workers. This would involve working hand in hand with business (and ideally trade unions) in a way we haven’t really since the 1970s.
Lord Mandelson has been one the Government’s most vocal supporters of industrial policy, and here is the test.
WestStar aimed to focus on green technology:
Weststar, which already has a joint operation with LDV to import Maxus van kits for assembly and sale in the Far East, will invest in “green” technology, focusing on production of electric vans.
Here then is a chance for the Government to act. The best model may well be what the US has done with Chrysler.
The advantage are many – relatively little cost (liabilities estimated at £60mn), helps develop green technology, protects jobs and, perhaps best of all, could be the first demonstration of what a new industrial policy would look like. I don’t go as far as Dave Osler’s call to nationalise, but I do think we have a clear case here where state intervention would be welcome.
As I have noted previously, I suspect the UK auto sector will have to shrink, but what is important now is managing the transition.
It would be wonderfully ironic if out of the ashes LDV, the last remnant of British Leyland and failed industrial policy of the 1970s and new more successful economic industrial policy could be born.