Why Labour needs a manufacturing strategy


By Tony Burke, assistant general secretary, Unite

Despite a last gasp improvement in manufacturing figures at the fag end of last year, after four years of austerity measures the UK economy flat-lined in 2012.

ManufacturingMany analysts and commentators are already predicting this year will prove to be “groundhog day” for the UK economy – more stagnation, more cuts – more austerity.

While other countries have adopted an interventionist strategy to try to get their economies moving, notably Germany and the USA, the UK and EU economies such as Greece, Spain, Portugal and Ireland are trapped in never-ending austerity measures that drive down economies and hit workers the hardest.

Their mantra is “there is no alternative”.

The Coalition austerity measures, attacks on welfare benefits and on employment rights are taking us backwards not forward.

If we are to move forward one important way to do it is through an interventionist strategy in the manufacturing sector.

Apart from some good news in the automotive industry, the rest of UK manufacturing has limped along, with the government acting like Mr McAwber – hoping for something to turn up. Unite has strongly argued for an interventionist manufacturing strategy and we are campaigning for this in the Labour Party.

In 2012 we saw a number of closures and big job losses with some companies still wedded to moving work out of the UK in a “race to the bottom”. The closure of the Coryton Oil Refinery in Essex means the UK’s energy needs could be compromised in the long term.

The mass redundancies at Honda and Ford, with the proposed closure of the Transit van plant in Southampton, will also hit UK manufacturing hard. On top of the job losses that are headline grabbers there are many small and medium sized companies who have been denied support from the Banks and have gone to the wall costing thousands of well paid, skilled jobs.

The Labour Party has begun to realise the importance of manufacturing. New Labour had given up on manufacturing until it was too late, clinging onto the notion a “light touch”, deregulated finance sector and over-reliance on the service sector would sustain the economy.

The Labour Party has realised the error of its ways.

Late last year Labour initiated a full debate on industrial strategy and policies proposed by trade unions are hopefully set to become Labour policy.

Unions have long argued the need for manufacturing to be at the heart of the economy and the need to defend our strategically important industries, and have also argued there needs to be continued financial support for manufacturing industry through interventionist policies and targeted support for small and medium sized enterprises.

We need a new skills framework and we need to maximise the opportunities that the low carbon revolution has to offer.

These are common sense policies that will get things moving again – rather than the approach of the coalition government. Introducing, as the Conservatives and Liberal Democrats have done, failed 1980s-style youth employment schemes, failed Enterprise Zones, and attacking basic employment rights, will do nothing to boost the economy and will not create jobs in the long run.

The response that Osborne’s “shares for rights” scheme, where workers are encouraged to give up their basic employment rights in exchange for company shares, has received a lamentable response – not just from workers but from employers too.

In Europe this week the Socialist group of MEPs have demanded the EU intervenes and uses considerable muscle to get manufacturing moving again as austerity measures are biting hard and some countries are fearful of big plant closures this year.

Rather than more austerity, more cuts to welfare and policies which hark back to the past we need to move forward with a strategy for manufacturing and policies for growth – something Labour must now adopt in 2013 and deliver on in power.

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  • julian

    This is quite true. Unfortunately this is a 50 year+ process of deindustrialisation, and favouring financialisation, that has been supported by both Labour and Tory govts. It seems highly unlikely at this late stage that any Labour Govt would be able to reset the clock, even if the banksters were going to let them.

    Britain was the first country to industrialise. It is going to lead the way into a deindustrialised banana republic (sans bananas). Check out the recent revelations of our dear police if you don’t think we already have banana republic type law enforcement.

  • julian

    BTW, why should a bunch of lawyers and PPE grads care one jot about UK manufacturing? They’ll still get paid lots of moola in Parliament and afterwards as “consultants” even if UK manufacturing is at 0% and most people are out of work. As fossil fuels decline, so will the UK, so it will of course keep on that staple of banana republics – being a tax haven, which it is anyway really.

  • LB

    You’ve forgotten, more tax.

    It’s screwed. You’re in denial.

    The evidence is here on the bottom of page 4.

    http://www.ons.gov.uk/ons/dcp171766_263808.pdf

    5,300 bn (as of today) of debts, run up by people like you, and then hidden off the books so you can carry on looting people’s pensions.

    Now those debts are due, we’re screwed.

  • LB

    http://www.ons.gov.uk/ons/dcp171766_263808.pdf 5,300 bn of debt, hidden off the books by the fraudsters in westminster, and not a banker involved.

    That’s why they are desperate for cash, and will tax it if its nailed down, if it moves, no matter what.

    So they have taxed manufacturing out of business. It’s moved to where the taxes are lower, the regulations lower.

    Now manufacturing in the UK is all about the IP, and you then outsource the making to China etc, the sales to Belgium, the servers to Ireland. You even offshore the ownership of the IP to a low tax regime. Then you remit what you spend. It doesn’t take many people in the UK to run a business model like that.

    The end result is that IP and the ability to tax has gone – forever.

  • Newsbot9

    We? No, your offshore accounts are fine. And no, tax revenue is not down that far, despite your efforts. So far. You are simply attempting to prop up your lifestyle on the back of the 99%.

  • Newsbot9

    Nope, that’s your death cycle economics. Taxation in this country is very moderate, and business frequently doesn’t need to pay it anyway. Westminster fraudsters like you no doubt have that kind of debt, but stop proving random government links!

  • Newsbot9

    Instead of playing up our strengths, you’re focused entirely on spending massively to get perhaps a bit of industry, maybe. Wages will plummet…

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