By Tony Hudson
George Osborne has failed to match his rhetoric on British manufacturing, according to a new report released today.
Think-tank Civitas claims British companies are struggling to compete due to a lack of government help, despite the chancellor promising to revitalise the manufacturing industry.
"George Osborne said he wanted a Britain 'held aloft by the march of the makers' and has even resurrected the idea of an 'industrial policy'," Civitas research fellow Kaveh Pourvand said.
"Rhetoric aside, however, ministers are still wedded to a laissez faire ethos when making key decisions and so have missed opportunities to strengthen UK manufacturing."
According to the report British companies are losing ground to competitors from countries such as Germany and South Korea, whose governments provide regular manufacturing contracts and other substantial support.
The report argued the government was oblivious to the importance of providing stable and predictable procurement contracts to domestic firms and urged a change its approach to the manufacturing industry, which has been damaged by weak industrial policy.
"Large parts of British industry are caught in a Catch 22 - they cannot obtain government contracts because they lack the domestic capacity to be cost-competitive, but that domestic capacity cannot be built without government contracts," Pourvand added.
"By contrast, overseas firms that beat British companies to contracts operate in industries where capacity has been built up through careful government intervention."
Several examples of cases were cited where the government awarded contracts to overseas companies ahead of British ones, including the construction of four new Royal Navy transport vehicles being awarded to South Korean shipbuilder DSME, and the Thameslink contract for 1,200 new train carriages to Siemens, rather than Derby-based Bombardier.