An Industrial Policy for the Twenty-First Century

A Labour government must pursue an industrial policy that renews our economy and redistributes our common wealth.

Credit: Getty Images

Manufacturing is transitioning at a pace not seen since the Industrial Revolution. Whether it’s the rapid plant-level introduction of automated robotics, control, and management systems directed by algorithms and artificial intelligence, or pressures from governments and consumers to address genuine concerns like climate change, the impact on working people can be seen in decisions being taken every day.

Westminster isn’t listening, and hasn’t been for a long time. Take Honda’s recent devastating decision to close its Swindon factory. The media tried to frame the issue around Brexit — Remainers say thousands of jobs would be safe if we weren’t leaving the European Union, meanwhile company bosses deny it has anything to do with it. But Honda’s decision in Swindon is actually about so much more than the here and now.

Of course, crashing out of the EU without a deal would have a significant impact in an industry reliant upon just-in-time, synchronised delivery of components to maintain daily production, with some 350 lorries a day arriving at the Honda plant from EU suppliers. 

On the other hand, Honda bosses can’t pretend that the EU’s trade deal with Japan, giving the company near frictionless trade without actually having to locate within Europe, hasn’t had an impact on their business investment decision. If Theresa May refuses to drop her ideological red lines on membership of a customs union and single market access, it will be easier and cheaper to import vehicles from Japan than from a post-Brexit Britain just twenty-two miles away.

The Honda crisis, mirrored across the car industry, shines a light on what the UK must do to mitigate both the impact of Brexit and global shifts away from the combustion engine. If we are to protect our manufacturing base, as well as hundreds of thousands of skilled jobs and the families and communities that rely upon them, the British motor industry needs government intervention, investment in infrastructure, and innovation. It needs an integrated, comprehensive industrial strategy.

A Race to the Bottom

The message from the first meeting of the Honda task force, launched by business secretary Greg Clark in response to the firm’s bombshell announcement, was that Swindon could and should be at the core of an innovative transition from combustion engines to fuel cell and electrical propulsion. Another message of support from a task force is one thing, but government investment in our economic ‘jewel in the crown’ halved over the last year. 

Energy minister Claire Perry was on the Today programme on the morning that school students walked out in protest at climate change. There she claimed, unchallenged, that the UK was driving the revolution to electric vehicles (EVs), boasting of how we make one in five of these vehicles sold in the EU. She added that by bringing in electric and hydrogen trains we are stepping up government action to cut harmful emissions.

In reality, one in five of a very small market is hardly any at all. Following the disastrous demonisation of diesel by the government, UK diesel sales have tumbled 42 per cent year-on-year while sales of alternative fuelled vehicles including electric have risen by just 3.9 per cent. The fact is that without the necessary infrastructure and a public procurement strategy pump priming EV sales, they remain conscience acquisitions of the middle classes, often a second or third car left little-used in a driveway.

The move away from diesel and petrol to plug-in electric or hydrogen vehicles is a huge challenge. It needs serious government support for manufacturers, public investment in green energy generation, hydrogen capture, and research, and the development of battery and fuel cell technologies. It requires action to ensure we manufacture and recycle here in the UK, targeted procurement of company and public sector fleets, car share schemes, a tax strategy, and incentives, including free access to public transport, as well as greater vehicle choice. 

Even a small portion of our £268 billion public procurement budget could significantly assist in transitioning public service vehicles, taxi, rail, and bus fleets to clean fuel. Yet such innovative and strategic investment is almost entirely absent. This is even the case when it comes to transforming existing infrastructure, such as street lighting, or providing greater availability of hydrogen in filling stations. Countries like Norway and China are implementing long-term strategies for the mass uptake of EVs, while Britain is being left behind.

The government’s Road to Zero strategy paper emerged in 2018, more than a year after Michael Gove announced, without consulting the auto industry or trade unions, that there would be a ban on the sale of diesel and petrol vehicles by 2040. The paper talked about ‘ambitions’ rather than ‘targets’, before saying that ‘at least 50 per cent, and as many as 70 per cent, of new car sales and up to 40 per cent of new van sales [would be] ultra-low emission by 2030.’ Information about how this twenty-three-fold increase could be achieved without significant government intervention was not forthcoming. 

State investment in hydrogen technology is even more negligible. An ambitious government could do so much with it: hydrogen fuel has water emissions and lacks the ‘range anxiety’ issues often associated with EVs, where drivers worry that their battery will run out before reaching their destination. Yet there are just a handful of hydrogen filling stations across the UK and most of those are within London’s M25 motorway. Compare that to Japan, home to Honda, Nissan, and Toyota, which is aiming to have 160 refuelling stations by March 2021 to support a fleet of 40,000 hydrogen vehicles.

The UK is home to leading hydrogen supply and storage companies, and has hosted much of the innovation breakthroughs that have propelled the technology to this point. But, without action now, it will become another technology we’ve failed to invest in through to production, preferring instead to make money for corporations by flogging licences to manufacture overseas while Britain continues its slide towards becoming an almost completely service sector economy.

The Road from Thatcherism

Tony Benn’s Alternative Economic Strategy of 1975 was the last time we saw a coherent industrial strategy capable of engineering economic and social change by ensuring unions, government, and industry work together. The government’s current policy will go down in history as not just another wasted opportunity, but an act of gross industrial negligence.

Margaret Thatcher’s neoliberal dogma, enthusiastically embraced by New Labour, ensured non-intervention for over forty years. But now we have a Labour Party developing an industrial strategy capable of genuine redistribution of our common wealth, with all the benefits in productivity that genuine investment in both people and plant will bring about, as well as initiating a real debate about who controls the wealth that working people create.

A few years ago, an Oxfam report was released which showed that the richest eighty-five people in the world own about the same amount of wealth as the poorest half of the world population. Back then I got into trouble for a remark I made about this. Pointing out that they could fit on a double-decker bus, I said if that bus was driven by a Unite member, who could tell what might happen. 

The political point I was making about grotesque wealth inequality was lost on the right-wing hacks who reported this, with all the usual fake outrage. What’s genuinely offensive is that, in 2019, we’d only need a single decker bus (with seats to spare!) for the twenty-six richest people who now own as much as the poorest 50 per cent. Such is the obscene concentration of wealth we’ve seen in these years of austerity.

Tom Kibasi of the IPPR think tank wrote recently that power imbalances are just the start of our economic problems. He talked about the need to build public commitment for the patience, hard work, and sacrifice it will take to construct a vision of a new economy. A green industrial strategy must be at the heart of creating good, shared, and sustainable jobs, but a political strategy is key to wrenching the wealth from the few for the development of the many. A strategy for collaborative and shared ownership models is vital if we are to engage people in a debate about the future of work and fair distribution of our common wealth.


The Tories can boast all they like about low and falling unemployment figures, but insecure, zero-hour jobs don’t increase people’s spending power. Robots don’t buy cars, live in homes, raise families, or invest in their future. 

It’s possible to create one million carbon-neutral, high-tech manufacturing jobs through investment in public energy generation. This must include new technologies such as the tidal lagoons that the Tories have pulled support for, national infrastructure, and manufacturing projects, including hydrogen fuel technology and lithium-ion battery production, as well as recycling initiatives. 

North Sea decommissioning works could create thousands of local jobs supporting the Scottish economy while a ‘build local’ policy could do so much to support our core industries. Some £158 million worth of steel was procured by our government during 2017/18, yet just 43 per cent of it (£68 million) was produced in the UK. And a Social Value Act would set stipulations for UK public investment in infrastructure as well as manufacturing of our public transport and defence needs to contain a minimum UK content, supporting local supply chain investment and development.

In the short term this will mean tempering the impact of Brexit — whatever type of Brexit we have by the time this article is published — with an interventionist government pursuing serious investment. We need to remove barriers to new manufacturing investment, support an integrated export-led manufacturing revival and the development of local supply chains. Build local is not just a slogan, but a strategy we should embrace. After all, how can we be taken seriously in our commitment to EVs when we don’t even produce their batteries in the UK, but transport them, along with the raw materials for their production, around the world at the cost of high emissions?

Hiding behind public procurement regulations and open competition is an ideological failure to grasp the benefits of spending UK taxpayers’ money supporting jobs, families, and communities here in the UK. There’s nothing wrong with factoring in the social and economic value of spending a pound locally, nor is it wrong to take into account the devastating impact on jobs and our economy of not spending that pound here. It’s no good having a desperately-needed national investment bank and regional investment strategy if you don’t give that support to the national and local economy.

We urgently need to turn the tide on the crisis facing our manufacturing industries. This will mean addressing the growing gap in skills and the loss of knowledge that follows a plant closure. The only way to secure a long-term future for manufacturing is to have a government investing at the cutting edge of technology and innovation. If we do that with clear objectives we can all benefit from the common wealth it will create. If we don’t, Honda may only be the first of a string of large employers to divert future investments from our shores. It’s a fight we can’t afford to lose, and one that we can win if we pull together as a movement. Politically and industrially, we need to fight this together.