British-based manufacturers are to receive advance details of Government contracts, in a bid to help them win billions of pounds worth of business.
It follows a long-running campaign by MPs who want Whitehall departments and public services such as the police to buy British cars, instead of spending taxpayers’ money on products built overseas.
But Business Secretary Lord Mandelson has rejected demands that officials must be ordered to buy British.
Instead, he said the Government would give British firms early warning of upcoming contracts so that they could ensure they had the skills and technology needed to make a successful bid.
The promise was part of an industrial strategy published by the Department for Business, Enterprise and Regulatory Reform in advance of tomorrow’s budget statement by the Chancellor, which is expected to contain more help for the automotive industry.
West Midlands MPs have been campaigning for public services to buy British vehicles, such as Jaguars made in Castle Bromwich, Birmingham. Erdington MP Sion Simon (Lab) wrote to police and fire services and local councils across the country, demanding details of the procurement policies.
Ian Austin (Lab, Dudley North), the Minister for the West Midlands who is close to Gordon Brown, has urged ministers to buy British.
But government procurement policies have actually made it harder for British car-makers to win contracts, with departments preferring to buy “hybrid” cars such as the Toyota Prius and Honda Civic Hyrbrid, both made in Japan.
The latest annual report from the Government Car and Despatch Agency, which is responsible for 171 official government cars, boasts: “We have massively increased the number of Toyota Prius on the ministerial fleet and we are taking delivery of Honda Civic hybrid cars. In all, we now have over 100 hybrid vehicles, which switch to an electric motor when sitting in traffic.”
Lord Mandelson said the Government would introduce a new “pre-procurement” phase when awarding contracts, to help British firms win more of the £175?billion spent annually by the state.
Speaking at the launch of the strategy, Lord Mandelson welcomed reports suggesting the worst of the recession may be over, declaring: “This is encouraging news. It should do more to instil greater confidence amongst people in the economy, if we did not have other people talking the economy down.”
And Gordon Brown, the Prime Minister, said Britain was “overcoming” the recession as he insisted state-owned banks were lending money to businesses. Mr Brown said agreements signed with the banks to increase lending to businesses and homeowners over the coming year were “the first of this kind in the world”.
The Royal Bank of Scotland had agreed to increase lending by £25?billion, Lloyds/HBOS by £14?billion and Northern Rock by £10?billion, he said.
Meanwhile, HSBC had announced a voluntary agreement to boost lending and more banks were expected to do so over the coming days.
The Budget is likely to include plans for a long-awaited scrappage scheme, in which motorists are given a cash incentive to trade in older vehicles for newer, environmentally-friendly models.
But Alistair Darling, the Chancellor, is also expected to warn that UK output could shrink by three per cent this year.
The CBI also warned the recession was far from over, as it published an economic forecast predicting that recovery is still a year away and will be “slow and fragile”.
