German and British factories

The UK government has spent more money than it should on supporting some banks. Now it comes to the car industry the cupboard is bare, and competition rules are applied.

Meanwhile, the German government is in the drving seat on the General Motors discussions, apparently willing and able to assist.

If there are fair rules to prevent subsidy and intervention in the EU, they should have the same effect on the German and the UK governments. As a long standing critic of government equity support for UK banks, I am not suddenly an advocate of equity support for Vauxhall. As a believer in avoiding subsidy and finding solutions to industrial and banking problems which will produce stronger businesses in the longer term, I am worried that one government is leading the way on the GM Europe disposals and ours is fighting from the side lines. The UK government must make sure a Vauxhall factory is not lost through politics.

Grants and aid for new technology and for green purposes are allowed within the common rules. Short term support against proper security may be permissible in some cases. If there is any kind of common market that works, both Germany and the UK should have a place round the table, and should be operating under the same pro competition framework.

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12 Comments

  1. Amanda
    Posted May 28, 2009 at 8:07 am | Permalink

    And this demonstrates my comment on ‘power to the people’ exactly. Europe has no psyche for the common welath. Nationalist interst will always prevail. Another example is the disgusting decision by France not to invite the Queen to the DDay celebrations – until now when it is far too late.

    When will the Tories put the British people first and foremost, and stop following socialist wishful thinking. Our ancstors undestood so well that power comes from strength, and if you want to change the world, you have to do it from a position of power – not weakness and capitualtion.

  2. alan jutson
    Posted May 28, 2009 at 8:16 am | Permalink

    I have a feeling that Protectionism is rearing its ugly head.

    When the chips are down most Countries will attempt to protect their own population, even if it means disadvantaging another who is upposed to be in the same Club.

    Its like seats in a life boat, yes women and children first, as long as there is space for all of the women and children.

    If there are only a few spaces left, would you stand by and let your family go without, or would you bend over backwards and do what it takes to make sure they got a seat.

    The last 10 years would suggest that Gordon Brown will still be negotiating for some more lifeboats to be built, and arguing over the specification, long after the ship has gone down, along with those for who he requested the lifeboats.

    How can a Company like Fiat be looking at taking over Chrysler and General Motors Europe without State aid.

  3. Brian Tomkinson
    Posted May 28, 2009 at 8:52 am | Permalink

    Another example of the way governmental meddling distorts the operation of the market made even worse by the activities of the EU. How many more examples do we need before we have politicians in Westminster prepared to withdraw from this anti-democratic institution?

  4. Waramess
    Posted May 28, 2009 at 9:05 am | Permalink

    I imagine you write more in anger than suprise; the EEC was never more than a Franco German alliance and we should leave them to it.

    Once we get rid of this wreched government we should consider resigning membership of the EEC, which will be heartily supported by a majority of British people, and let the market and the rules of bankruptcy look after these sorts of things.

    The Franco/German alliance can then continue their cosy alliance and let the politicians organise their bail-outs without our involvement

    It will be a lot better for us in the medium term; and a lot healthier.

    Politicians should not involve themselves in such matters; they are neither capable of picking the winners and losers nor are they capable of ensuring such bail-outs are good value or indeed will work in the long run.

    Look at the mess Ted Heath made of it

  5. Demetrius
    Posted May 28, 2009 at 9:31 am | Permalink

    There is a dreadful historical irony in all this, in that after 1945 the British Car Industry had the chance to take a major stake and control over a large part of the derelict German industry. They walked away from it, assuming that the Germans would never be able to compete. Now apart from a few small specialist companies, ours will be gone, and the Germans still functioning on a world basis. What a mess.

  6. MarkE
    Posted May 28, 2009 at 10:40 am | Permalink

    The motor industry has been suffering from over capacity for years, not merely since the start of the recession. They failed to take the hard decisions when they had the chance and now want taxpayers’ money so they can continue to avoid them. I can see a very worrying future where the strongest companies, which will dominate their markets, are not those with the best products or customer service, but those with the ear of government who can rely on taxpayer funded subsidy and legislation to “protect” them (and of course the jobs they provide in carefully selected constituencies) from competition. Consumers will take what they are given because they won’t be allowed to choose to buy better, so manufacturers will make what they can get away with (which will be dross).

    We will see reverse Darwinism with the survival of the weakest – If you are a hopeless case you will get a taxpayer funded subsidy, but well managed companies won’t qualify, so they will be unable to compete.

  7. marksany
    Posted May 28, 2009 at 11:12 am | Permalink

    John, you are a funny man, a very funny man: Germany, looking after Germans, to the detriment of non-Germans, in teh EU?

    How can this happen?

    Surely the rules apply equally to all EU mmeber states. Its not like the EU was created just so the Germans and French could create a system to support their wealth creating agri-industrial complex. Hang on….

    ….have we been had?

  8. Bob Jones
    Posted May 28, 2009 at 11:41 am | Permalink

    The great irony of the Unions calling for political intervention to stop the negative effects of political intervention from Germany for the U.K., is truly lost on them. When will they learn that politics + business do not go together? It always ends badly.

  9. oldrightie
    Posted May 28, 2009 at 11:55 am | Permalink

    Now what about these expenses? Much more important than any financial or governance matters, surely?

  10. Citizen Responsible
    Posted May 28, 2009 at 12:19 pm | Permalink

    The German government seems to have hi-jacked the negotiations with GM over its European disposals and even seems to be vetting prospective buyers. Saving historic “Opel” cars and jobs could become a campaign issue as politicians in Germany gear up for the federal elections in September. If Britain, Belgium and Spain are not fully involved in the negotiations, when the horse trading is over, there will be no prizes for guessing where the plant closures will be.

  11. Adrian Peirson
    Posted May 28, 2009 at 2:03 pm | Permalink

    If the Car Companies ( and others ) fail, then the Banks and Globalists will be able to buy them up cheap, I think this is the intention.

    Isn’t the head of Fiat a regular Bilderberg Attendee.

  12. Mike Stallard
    Posted May 28, 2009 at 2:52 pm | Permalink

    Back to the 1970s….deLorean with its wings……Morris and Austin…..

    And why?
    Well, how about there being two MPs for Labour in Luton one of whom is exemplary over expenses?
    How about there being some Lib Dems in the Euro Elections in Chester near Ellesmere Port?

    Nah…..

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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