Automotive subsidy warning

Posted on 5 Jul 2010 by The Manufacturer

Business Secretary Vince Cable has warned car manufacturers that the coalition Government has no desire to safeguard the industry through subsidies.

Speaking to the Society of Motor Manufacturers and Traders International Summit last week, he said the Government will stand by the industry but can only offer “genuinely affordable” support.

The previous Labour Government offered state aid to attract Nissan and Ford to bring low-carbon production to the UK, set up the scrappage scheme to bolster falling car sales, and created the Automotive Assistance Programme to provide loans to struggling companies. The Coalition is also reviewing a planned £5,000 incentive on purchases of low carbon-vehicle.

“I’m not disowning that past,” said Cable. “It was important in its context but we’re now in a different world. I recognise that other countries have offered more, but we can’t fight – and we can’t win – a subsidy war. But I want to make clear we support the industry. There is a difference between liberal and laissez-faire. I’m a liberal.”

Mr Cable said he wanted the Government to act as a facilitator “bringing together industry and researchers and helping encourage research commercialisation”.