The Tories’ Industrial Failure

Ideological opposition to state aid has seen big promises on industrial policy dissipate into more job losses and deindustrialisation.

When Theresa May came to power in 2016 and announced that the Department of Trade and Industry was to become the Department for Business, Energy and Industrial Strategy, those of us arguing for Britain to pursue a robust industry strategy could have been forgiven for thinking that the government had heeded our calls.

In the weeks that followed, the prime minister’s announcement was trailed by soundbites about the need to ‘protect manufacturing’. Studies were commissioned into productivity, and into German policies that protect its medium-sized supply-chain companies (known as ‘the Mittelstand’). There was talk of skill shortages ending. UK manufacturing, we were told, was to be the powerhouse of the economy.

Manufacturers and trade unions waited. And waited. As the weeks turned into months, we heard that the government’s draft document had been shelved or had been sent back for revision. When, in November 2017, the Tory industrial strategy was finally launched, it quickly became apparent that it was a dud: long on words, big on typeface, but short on detail with no underpinning resources. References to trade unions were entirely absent from its plethora of platitudes. Since then, any pretence of an industrial strategy has all but been abandoned. Once again for British industry, a Tory government has flattered to deceive.

For those of us in the trade union movement this isn’t surprising. On almost every occasion the Tories have had a chance to help industry in Britain they have bungled it, Bombardier in Northern Ireland being a recent example. When Boeing demanded massive tariffs on Bombardier’s C Series passenger jet, which would have destroyed thousands of skilled jobs, the Tories effectively waved the white flag, afraid to upset the Trump administration. In the end, the US trade commission was a greater help: it threw out Boeing’s claim.

When Trump announced his steel and aluminium tariffs, the government despatched Secretary of State for International Trade Liam Fox to the US, only to see him to come back empty handed. It was left to the European Union to pick up the cudgels. When Melrose Industries acquired GKN, a British company that traces its engineering history back more than 250 years, it took fifty-seven days before the Secretary of State intervened to seek assurances about the future of the business and its jobs. The unwanted takeover had no support from the workforce, the aerospace, and the automotive industries, and was also opposed across the political spectrum. Yet it was still allowed to go ahead in the full knowledge that Melrose would eventually sell off parts of the company to make massive profits.

It doesn’t look like this pattern of neglecting British industry is going to change. Three Royal Fleet auxiliary ships — that could be built here providing work in our hard-pressed shipbuilding industry, as well as using UK steel and technology — could now be built abroad despite a massive lobbying campaign. Plans for the construction of the groundbreaking renewable energy project in the Swansea Tidal Lagoon were scrapped despite years of work, while our automotive industry is facing uncertainty on the transition to electric technologies with government support nowhere to be found.

State intervention should not just come at times of uncertainty, such as we saw in the steel crisis. We need a government that takes responsibility for the development of Britain’s productive capacity and pursues a policy of long-term and strategic investment. This means putting money into infrastructure, into aerospace, science and automotives, and sustainable energy needs; as well as protecting our foundation industries and ensuring we are adequately protected against the dumping of goods including steel, tyres, and ceramics. We also need to change the rules of the game by reforming the takeover code to safeguard jobs and protect the long-term future of our industries. A government that stands by as British industry is carved up and sold off is engaged in neglect.

But it isn’t sufficient just to support industry. We also need to make sure the jobs are worth having. Any industrial strategy worth its name will give workers a strong collective voice by proposing the extension of collective bargaining and facilitating workers’ representation in the workplace. The Tory government is ideologically wedded to failed industrial policies that make all of the above impossible. It is only by electing a Labour government, with a socialist industrial strategy developed by John McDonnell and Rebecca Long-Bailey, that we can begin rebuilding not only our manufacturing base but the whole of our economy.