Indeed, an engaged UK and not a dreaming one. Not sure if the current PM is any change to long line of previous ones. Can’t see him making a case for the EU or getting his govt to do it
I’m no expert but I think the UK is basically waiting and seeing how the security situation in Europe works out. If the US guarantee can no longer be relied on, everything changes.
Yes, I think it can, although that will take time even if we start going forwards instead of backwards. But also, the article isn’t as clear as it could be. The key idea is probably expressed better elsewhere in the article, not so much advanced manufacturing per se as holding on to the company as the idea turns into product (including services).
Thanks for the clarification, my impression of UK officials is they would have no ability to do that kind of mildly directive work, for example, they seemed very badly advised on state aids.
We aren’t obliged to rely on officials for this. For example, we have a large venture capital sector through which the government could channel funds in a fund-of-funds way. And btw that kind of funding isn’t even spending - it’s investment.
Another fascinating and perceptive read. Three points. One thing that’s long been said about the U.K. is that it’s good at inventing things, much less good at commercially the results (which is very much an echo of your main point here). Second the move of AZs R&D from Alderley Edge to Cambridge was driven by the perception of international investors that the Golden Triangle is where world class pharma companies do their research. Interestingly AZ retained its manufacturing plant in Macclesfield, but that has attracted much less interest than the move of R&D. Finally, Starmer’s Labour Party seems unwilling to argue openly for restoring the power of labour relative to capital, or to argue more widely for redistribution so we get this odd mashup of re regulation in some areas (buses and the labour market) with deregulation in others (land use being the obvious example) all underpinned - and undermined- by some rather silly tax pledges and fiscal rules to demonstrate “competence”.
Yes, it has long been said that the UK good at inventing and bad at making. But this isn't some kind of natural feature, like the Pennines. It's something we can make worse or better. Let's not be fatalistic.
On pharma manufacturing, Macclesfield is very much the exception. I'm told Eire exports about $50bn of pharmaceuticals each year, and has just put the corporate tax rate on it up to 15 per cent from 10 per cent. I guess that is a Brexit dividend for them. But maybe there's an opportunity there to pull some of that back to the UK. Very long game.
You're right about the tentativeness. I suppose I think Rachel Reeves wanted to fix the government finances and the next step is growth, which will revolve around the launch of the industrial strategy. So this feels like the critical moment, when it's all in flux.
I’m not being fatalistic, just reporting something that’s been a feature of discussions of U.K. economic policy for over half a century, including when we still built hovercraft, supersonic airliners and nuclear power stations,. There is nothing in current discussions of industrial policy that would have been out of place when Selwyn Lloyd established NEDC and Harold Wilson the Ministry of Technology and the IRC. The question is why? Not a criticism of your piece which I thought was excellent. https://history.blog.gov.uk/2019/06/17/the-industrial-reorganisation-corporation-and-the-1968-reorganisation-of-british-manufacturing/
That's a very different time and I must say I can't see its policy relevance now. More recent would be the Brown era instruments such as Hauser's British Fraunhofer and Energy Technologies Institute, not to mention the older policy framework of RDAs, scrapped or downgraded by the ConDems. Would those be apt and worth reviving now, or are they also out of time, somehow? The contemporary situation is not easy.
History always carries lessons: we just need to look for them. Starmer has made the same mistake as Wilson in 1964 and by committing to a policy to reassure financial markets/head off a political attack line (devaluation in Wilson’s case, fiscal rules, silly tax promises and the EU in Starmer’s) has rendered his growth target unachievable. Raising the underlying growth rate isn’t something which is under the control of politicians in the short run. An industrial strategy will help but isn’t going to be enough.
I didn’t mean that your comment was fatalistic, only that there’s a lot of that around, mostly in a subterranean unarticulated form.
On the Brown era stuff, the abolition of the Regional Development Agencies was disastrous, and predictably so. It was however entirely logical if your approach is Thatcherite. The other things, like the Fraunhofers, were just nibbling round the edges. Not bad in themselves but massively underpowered.
The fundamental problem is the lack of consistency in policy. RDAs and Government Offices are a good example. Both could have been repurposed by the Coalition (as GOs - introduced by Major - were by New Labour) rather than simply scrapped because Pickles didn’t like things called “regions”. Similarly, it was slightly ironic that it was Heseltine who finally scrapped NEDO which had a long issue of looking at problems around productivity. We just love ripping things up without asking why they haven’t worked and what might be done to improve things.
Thanks, but if the UK would be part of the EU some issues might be less problematic
True. Also, the EU would benefit from having the UK on board.
Yes, you are right, in that case everything changes
Indeed, an engaged UK and not a dreaming one. Not sure if the current PM is any change to long line of previous ones. Can’t see him making a case for the EU or getting his govt to do it
I’m no expert but I think the UK is basically waiting and seeing how the security situation in Europe works out. If the US guarantee can no longer be relied on, everything changes.
Do you think high tech manufacturing would generate many jobs, due to its automation, in any case?
Yes, I think it can, although that will take time even if we start going forwards instead of backwards. But also, the article isn’t as clear as it could be. The key idea is probably expressed better elsewhere in the article, not so much advanced manufacturing per se as holding on to the company as the idea turns into product (including services).
Thanks for the clarification, my impression of UK officials is they would have no ability to do that kind of mildly directive work, for example, they seemed very badly advised on state aids.
We aren’t obliged to rely on officials for this. For example, we have a large venture capital sector through which the government could channel funds in a fund-of-funds way. And btw that kind of funding isn’t even spending - it’s investment.
Another fascinating and perceptive read. Three points. One thing that’s long been said about the U.K. is that it’s good at inventing things, much less good at commercially the results (which is very much an echo of your main point here). Second the move of AZs R&D from Alderley Edge to Cambridge was driven by the perception of international investors that the Golden Triangle is where world class pharma companies do their research. Interestingly AZ retained its manufacturing plant in Macclesfield, but that has attracted much less interest than the move of R&D. Finally, Starmer’s Labour Party seems unwilling to argue openly for restoring the power of labour relative to capital, or to argue more widely for redistribution so we get this odd mashup of re regulation in some areas (buses and the labour market) with deregulation in others (land use being the obvious example) all underpinned - and undermined- by some rather silly tax pledges and fiscal rules to demonstrate “competence”.
Yes, it has long been said that the UK good at inventing and bad at making. But this isn't some kind of natural feature, like the Pennines. It's something we can make worse or better. Let's not be fatalistic.
On pharma manufacturing, Macclesfield is very much the exception. I'm told Eire exports about $50bn of pharmaceuticals each year, and has just put the corporate tax rate on it up to 15 per cent from 10 per cent. I guess that is a Brexit dividend for them. But maybe there's an opportunity there to pull some of that back to the UK. Very long game.
You're right about the tentativeness. I suppose I think Rachel Reeves wanted to fix the government finances and the next step is growth, which will revolve around the launch of the industrial strategy. So this feels like the critical moment, when it's all in flux.
I’m not being fatalistic, just reporting something that’s been a feature of discussions of U.K. economic policy for over half a century, including when we still built hovercraft, supersonic airliners and nuclear power stations,. There is nothing in current discussions of industrial policy that would have been out of place when Selwyn Lloyd established NEDC and Harold Wilson the Ministry of Technology and the IRC. The question is why? Not a criticism of your piece which I thought was excellent. https://history.blog.gov.uk/2019/06/17/the-industrial-reorganisation-corporation-and-the-1968-reorganisation-of-british-manufacturing/
That's a very different time and I must say I can't see its policy relevance now. More recent would be the Brown era instruments such as Hauser's British Fraunhofer and Energy Technologies Institute, not to mention the older policy framework of RDAs, scrapped or downgraded by the ConDems. Would those be apt and worth reviving now, or are they also out of time, somehow? The contemporary situation is not easy.
History always carries lessons: we just need to look for them. Starmer has made the same mistake as Wilson in 1964 and by committing to a policy to reassure financial markets/head off a political attack line (devaluation in Wilson’s case, fiscal rules, silly tax promises and the EU in Starmer’s) has rendered his growth target unachievable. Raising the underlying growth rate isn’t something which is under the control of politicians in the short run. An industrial strategy will help but isn’t going to be enough.
I didn’t mean that your comment was fatalistic, only that there’s a lot of that around, mostly in a subterranean unarticulated form.
On the Brown era stuff, the abolition of the Regional Development Agencies was disastrous, and predictably so. It was however entirely logical if your approach is Thatcherite. The other things, like the Fraunhofers, were just nibbling round the edges. Not bad in themselves but massively underpowered.
The fundamental problem is the lack of consistency in policy. RDAs and Government Offices are a good example. Both could have been repurposed by the Coalition (as GOs - introduced by Major - were by New Labour) rather than simply scrapped because Pickles didn’t like things called “regions”. Similarly, it was slightly ironic that it was Heseltine who finally scrapped NEDO which had a long issue of looking at problems around productivity. We just love ripping things up without asking why they haven’t worked and what might be done to improve things.