David Green: Cameron needs to emulate Thatcher and fight for British business "in the teeth of international competition"

Dr David G Green is Director of Civitas.

Yesterday in The Times David Wighton speculated that the Tories might be slowly accepting the necessity for an industry policy.  Last week Lord Young argued in The Times that the Government was not to blame for the loss of the Thameslink contract by Bombardier. The management of the company was at fault for being unable to make trains at the cost the customer wanted.

But the bidding process was not a straight fight between two manufacturers to discover who was the most efficient. The companies were required to finance the contract, with the result that their bids depended on their ability to borrow money rather than manufacturing prowess. Siemens has a credit rating of A+ and Bombardier's is BB+, which means that Siemens can borrow money for about 1.5% less.

The Government has had over a year to change the contract so that it was a contest between manufacturers not a fight between leaseback companies. It failed to do so. Why?

During the Thatcher years the Tories were split between the shallow market fundamentalism revealed in Lord Young's article and the pragmatic patriotism of Mrs Thatcher herself. She told the Commons in 1981 that she had helped British companies win contracts 'in the teeth of international competition'. British Steel was given state aid for nine years before its privatisation in 1988 and Rolls-Royce was also aided until its privatisation in 1987. On Lord Young's reasoning we should have let Rolls-Royce go bust in 1971.

As Mrs Thatcher recognised, legitimate pursuit of our national interest is perfectly possible without embracing Soviet-style economic planning. It's what all successful developed economies have always done.