Ed Balls rails against cuts to manufacturing

“Curtailing ambition”.

Ed Balls used his address to yesterday’s EEF Manufacturing Conference, perhaps unsurprisingly, as a platform to rail against spending cuts in advance of the delivery of the budget in two weeks’ time.

Playing straight to his manufacturer audience’s fear of Britain sliding into industrial obscurity, he warned that the government’s obsession with deficit reduction at the expense of long-term investment would “curtail ambition” in business and “militate against” the UK’s ability to compete with Europe (read, Germany).

His appearance at the conference coincided with the publication today of a labour-commissioned report by Sir George Cox, Overcoming short-termism within British business, which argues for executive pay to reflect success over longer cycles, tax changes to favour equity markets, and a mechanism to make infrastructure investment decisions independent of political cycles.

Despite a fantastically awkward bit of audience Q&A, in which Balls avoided verbally signing his party up to Sir George’s proposals even though the report author was sitting just feet away in the front row, the rhetoric seemed to go over well with delegates.

But in terms of a demonstration of long term-thinking, the Sturm & Drang over the budget’s treatment of British business paled in comparison to the day’s opening presentation, delivered by Jim “BRICs” O’Neill, Goldman Sachs’ chairman of asset management.

As one might expect from the man who coined the now ubiquitous acronym for emerging markets, O’Neill had very little to say directly about the state of British industry, and even the UK’s fortunes in the context of the Eurozone crisis.

Instead he spoke frankly, and backed by some very big statistics, about the overwhelming importance of emerging markets, particularly China, to both the UK and world economies over the decades to come.

Professing himself to be an optimist, O’Neill predicted the world economy would grow close to 4 per cent in the current decade, largely thanks to China which, he reminded us in words notoriously borrowed by David Cameron, grows the equivalent of Greek GDP every twelve and a half weeks. To underscore the point, O’Neill mentioned in passing that China had, since the end of 2010, grown by approximately the current size of the Indian economy.

He said that if the US and China could partially reverse their traditional roles with regard to production and consumption, so that China ended up “spending more and producing less” and the US vice versa, “it would be a very good sign – and this appears to be happening.”

In response to audience anxiety over the Eurozone, he acknowledged that while Europe was still the single most important export region for the UK, the percentage of UK exports going to the Eurozone had fallen from 55 per cent to 45 per cent over the last decade, and would likely fall further to 39 per cent by 2020.

By the same point time, he argued, 17 per cent of UK exports will likely be destined for the BRICs, while Germany will probably be exporting twice as much to China as to France. If we had known that in the early 1990s, he posited, there might never have been a Eurozone in the first place.

When drawn by session chair Krishnan Guru-Murthy on what he would do if he were chancellor in two weeks, his answer said more through understatement than Balls did through twenty minutes on the soapbox:

“Those nations with more emphasis on long-term fiscal consolidation rather than a "cut debt now" mentality tend to be recovering better… It’s entirely understandable to want to lower debt and to shrink [the financial services] sector… but trying to do both at once? It could be very difficult, and I think I’ll leave it at that”.

Ed Balls. Photograph: Getty Images

By day, Fred Crawley is editor of Credit Today and Insolvency Today. By night, he reviews graphic novels for the New Statesman.

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“Stop treating antibiotics like sweets”: the threat we face from antibioitic resistance

Currently, 700,000 people die per year from the resistance of microbes to medicine, and it is predicted that 10 million people will die per year by 2050.

Got a cold? Take some antibiotics. Feeling under the weather? Penicillin will patch you up. Or so the common advice goes. However, unless we start to rethink our dependency on antibiotics, a death every three seconds is the threat we potentially face from evolving resistance by microorganisms to the drugs. The stark warning was issued following a review which analysed the consequences we could face from needless administering of antibiotics.

The antimicrobial resistance (AMR) review was led by economist Jim O’Neill, who was tasked by the prime minister in 2014 with investigating the impact of growing resistance. Currently, 700,000 people die per year from the resistance of microbes to medicine, and the report predicts that 10 million people will die per year by 2050. An overwhelming global expense of $100trn will be the price to pay unless incisive, collaborative action is taken.

Antimicrobial resistance (as referred to in the title of the report) is an umbrella term for the resistance developed by microorganisms to drugs specifically designed to combat the infections they cause. Microorganisms include things such as bacteria, fungi, viruses and parasites. The report especially focused on the ramifications of increased resistance of microorganisms to anitbiotics.

Many medical procedures are dependent on the effectiveness of drugs such as antibiotics: treatments for cancer patients and antibiotic prophylaxis during surgeries, for example. All could be under threat by increased resistance. The continuing rise of resistant superbugs and the impotence of antibiotics would pose “as big a risk as terrorism”. A post-antibiotic world would spell dystopia.

Bacterial microbes develop resistance through evolutionary-based natural selection. Mutations to their genetic makeup are passed on to other bacteria through an exchange of plasmid DNA. Unnecessary prescriptions by doctors and inappropriate antibiotic usage by patients (such as half-finishing a course) also contribute. Over the years, a number of bacteria and viruses have found a way to counteract antibiotics used against them: E. Coli, malaria, tuberculosis and Staphylococcus aureus, to name a few.

The report employed the consultancy firms KPMG and Rand to undertake the analyses, and O’Neill outlines 10 different measures to tackle the issue. Key areas of focus include: global campaigns to expand public awareness, the upholding of financial and economic measures by pharmaceutical companies in the development of new medicines and vaccines as alternatives, greater sanitation to prevent infections spreading, and the creation of a Global Innovation Fund which will enable collective research.

O’Neill told the BBC:

“We need to inform in different ways, all over the world, why it’s crucial we stop treating our antibiotics like sweets. If we don’t solve the problem we are heading to the dark ages; we will have a lot of people dying. We have made some pretty challenging recommendations which require everybody to get out of the comfort zone, because if we don’t then we aren’t going to be able to solve this problem.”

In the foreword of the report, O’Neill states that over 1 million people have died from developing resistance since 2014. The urgency in tackling this issue is clear, which is why he has offered an incentive to companies to develop new treatments - a reward of more than $1 billion will be given to those who bring a successful new treatment to the market.

According to the report, the cost of successful global action would equate to $40bn over the next decade, which could result in the development of 15 new antibiotics. Small cuts to health budgets and a tax on antibiotics have been proposed as ways of achieving the financial quota for drug research.

Though the report has highlighted the severity of antibiotic resistance, some believe that the full extent of the matter isn’t sufficiently explored. O’Neill mentions that there are some secondary effects which haven’t been taken into account “such as the risks in carrying out caesarean sections, hip replacements, or gut surgery”. This suggests that alternative remedies should be found for non-surgical procedures, so that antibiotics aren’t made redundant in environments where they are most needed.

Since the analysis began in 2014, new types of resistance have surfaced, including a resistance to colistin, a drug which is currently used as a last-resort. Its affordability resulted in increased use, particularly as a component of animal feed, meaning greater opportunity for superbugs to develop resistance to even our most dependable of antibiotics.

Widespread drug resistance would prove to be a big issue for many charities tackling infections around the world. Dr Grania Bridgen from Médecins Sans Frontières told the BBC that the report addresses a “broad market failure”, which is important but isn’t enough.

Despite the mixed response to the report, it has had a seal of approval from the Wellcome Trust and the Department of Health. Speaking earlier this year, Chancellor George Osborne stated this issue “is not just a health problem but an economic one, too. The cost of doing nothing, both in terms of lives lost and money wasted, is too great, and the world needs to come together to agree a common approach.”

If antibiotics are to remain potent antidotes to infectious diseases in the future, we need to put a plan in motion now.