Government ambivalence and the lack of long-term strategic policy are to blame for the loss of 100,000 jobs in the car industry over the past ten years, according to a report published yesterday.

It came from the industry-led New Automotive Innovation and Growth Team, which warned that the industry is weakened because it lacks critical scale and an adequate supply base. Richard Parry-Jones, a former Ford executive who chairs the team, said that the industry was at “a tipping point”.

The report emphasises the weak state of the components industry and its importance for securing a solid assembly industry. It also highlights the fact that no big supplier carries out research and development in Britain and that this expertise has steadily left the country, leading to a “hollowing-out” of the sector.

Matthias Holweg, of the Judge Business School at Cambridge University, an adviser to the group, said: “This hollowing-out makes it fragile. The industry has lost 10,000 jobs every year for most of the last decade.” Mr Holweg said that the industry directly employs 384,000 workers, but 330,000 of these jobs could move offshore if manufacturing was pulled out of Britain. The remaining jobs are sales and service positions that would need to remain in the country.

Mr Parry-Jones said: “The Government has had a somewhat ambivalent approach. It has been laissez faire and occasionally interventionist when there is a crisis . . . In other countries there is a long history of government support and behind-the-scenes collaboration because there is a strong recognition of the importance of the industry.”

Over the past few months the Government has been criticised for moving too slowly to help the industry, which has been hit by a slump in car markets and heavy production cutbacks. The industry and unions have complained that the Government was slow to introduce a scrappage incentive scheme to boost new sales and that it has not freed up credit for the carmakers’ finance units to improve the availability of customer credit.

The industry group’s warnings come amid turmoil in the sector, with a number of large factories facing doubts over their survival. LDV, the vanmaker, has 30 days to strike a binding deal with Weststar, the Malaysian group that wants to buy the business; fears are growing for the future of Vauxhall’s Ellesmere Port and Luton (van) plants if Fiat takes over General Motors Europe; and Jaguar Land Rover is struggling to secure loan guarantees from the Government, which would protect the business.

The group said that since the last Department for Business automotive report seven years ago, there had been “a disproportionate share of plant closures”.

Echoing complaints from trade unions that it is easier and cheaper to sack people in Britain than elsewhere, the report says: “The perception is that the UK has more lenient redundancy laws and exerts less political pressure so that the UK has been affected by the shift in global manufacturing footprint more so than its peer group.”

Closures in recent years include General Motors’ Luton car factory, Ford’s Dagenham plant, MG Rover at Longbridge, Peugeot’s Ryton plant and Jaguar’s Browns Lane factory.

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