Blog: UK public spending cuts and the auto industry?
Dave Leggett | 18 May 2010
There's a bit of a public spending squeeze on in Britain and, as I understand it, there are few sacred cows that will be protected. The new regime in power is already blaming the last one for the public finances 'mess' that they have to pick up. Such is the way of politics.
The rather dour Gordon Brown actually cracked a good joke once about what he found when he became Chancellor of the Exchequer. There were three envelopes from the previous Chancellor 'to be opened in times of economic crisis' and in order, 1 to 3. The first one said, naturally, blame your predecessor. And we did a bit of that, admitted Brown. When things deteriorated further the second one was to be opened. It read 'blame the statistics' – and we did some of that as well, he said. And the third? It said simply, prepare the same three envelopes for your successor...
Anyway, the new British government is preparing an emergency budget. Substantial cuts in public spending are coming with everything up for review. How will the auto industry in Britain be impacted? That may become a little clearer over the next week or so, but my guess is that public support for the UK auto industry will be in the firing line as a 'soft target' early on. It's something that the UK industry should be lobbying on – right now.
The industry here is doing relatively well, but the business environment outlook is still mixed, with the economic importance of vehicle manufacturing and the jobs in supplier companies not to be underestimated.
Moreover, the strategy to develop the UK as a high-tech hub for electric drive vehicles for the long-term – with the positive economic benefits that flow from that – could be damaged if the spending axe is wielded in too crude a manner.