There is an alternative: governments can do what markets cannot

To succeed in age of globalisation, British manufacturers need a government that rejects laissez faire Thatcherism.

In the wake of Baroness Thatcher’s funeral last week, there has been much revisiting of the 1980s and her legacy. Though there are disagreements as to the benefits of her approach, there is one thing on which we can all agree: for better or worse, she did change Britain.

One impact of the revolution her policies unleashed was that too much of our manufacturing base was undermined. Nevertheless, Britain remains the ninth largest manufacturer in the world today, and a global leader in many areas of advanced manufacturing. The best of British manufacturers have shown they can meet the challenge of global competition.

For example, since Labour’s establishment of the Automotive Council – and the continued backing of it by this government – Britain has confirmed itself as a great place to make cars. The sector has attracted investment on an unprecedented scale and is on track to break the record for car production set in 1972.

What it means to be a leading manufacturer is changing as well, as the divide between the service and manufacturing sectors has become blurred. Last week I visited Rolls Royce, a global leader in aerospace. The majority of Rolls Royce’s revenues are generated not from manufacturing but from after sales service contracts. This shows how the benefits of a strong manufacturing base can spill over into other sectors, generating more of those well paying and satisfying jobs that our economy needs.

So the potential is there to grow our manufacturing base further. But British manufacturers need a government that backs their ambition. They need a proper, modern industrial strategy – demanding in its ambition and effective in its execution. This is not something which sits comfortably with laissez faire Thatcherism.

George Osborne – a disciple of the laissez faire approach - promised a "march of the makers". But overall, and despite a significant fall in the value of the pound, the reality simply has not matched his rhetoric. The latest trade figures were terrible, with the recent fall in exports reflecting a downward pattern that started in October 2011 according to the ONS. Companies with cash lack the confidence to invest. Firms needing finance to expand can’t get it.

One of the maxims of the neoliberal economic revolution Thatcherism unleashed was that governments must be subservient to markets. There was, Mrs Thatcher said, "no alternative". Recent history warns of the limits of this approach. It is also becoming abundantly clear that globalisation, far from limiting the space for governments to act, is making such action more important. It is not surprising that northern European economies which have pursued industrial strategies and applied a different model to Thatcherism have largely maintained their shares of expanding global trade through policies that work together to reinforce areas of national strength. 

Governments can do what markets cannot: they can help firms work together to address shared problems over skills or R&D, even as these businesses compete fiercely for custom. Governments can give direction and support to the animal spirits that drive investment and innovation. Through strategic use of procurement powers, governments can provide clear market signals, allowing British-based firms like Bombardier, whose plant in Derby I have also recently visited, to develop the capabilities needed to win public contracts. Public contracts can be used, after all, to advance public goals: to train apprenticeships, to encourage innovation, and to boost local employment.

Baroness Thatcher’s passing has revived strong memories of a bygone era. Yes, she changed Britain, but changed circumstances mean our country’s economy now needs something different too - there is an alternative and we must grasp it. 

 

A Vauxhall employee works on a vehicle on the production line at the Vauxhall car factory in Ellesmere Port, north-west England. Photograph: Getty Images.

Chuka Umunna is Labour MP for Streatham and Chair of the All Party Parliamentary Group on Social Integration.

Getty
Show Hide image

Rarely has it mattered so little if Manchester United won; rarely has it been so special they did

Team's Europa League victory offers chance for sorely needed celebration of a city's spirit.

Carlo Ancelotti, the Bayern Munich manager, memorably once said that football is “the most important of the least important things”, but he was only partly right. While it is absolutely the case that a bunch of people chasing around a field is insignificant, a bunch of people chasing around a field is not really what football is about.

At a football match can you set aside the strictures that govern real life and freely scream, shout and cuddle strangers. Football tracks life with such unfailing omnipresence, garnishing the mundane with regular doses of drama and suspense; football is amazing, and even when it isn’t there’s always the possibility that it’s about to be.

Football bestows primal paroxysms of intense, transcendent ecstasy, shared both with people who mean everything and people who mean nothing. Football carves out time for people it's important to see and delivers people it becomes important to see. Football is a structure with folklore, mythology, language and symbols; being part of football is being part of something big, special, and eternal. Football is the best thing in the world when things go well, and still the best thing in the world when they don’t. There is nothing remotely like it. Nothing.

Football is about community and identity, friends and family; football is about expression and abandon, laughter and song; football is about love and pride. Football is about all the beauty in the world.

And the world is a beautiful place, even though it doesn’t always seem that way – now especially. But in the horror of terror we’ve seen amazing kindness, uplifting unity and awesome dignity which is the absolute point of everything.

In Stockholm last night, 50,000 or so people gathered for a football match, trying to find a way of celebrating all of these things. Around town before the game the atmosphere was not as boisterous as usual, but in the ground the old conviction gradually returned. The PA played Bob Marley’s Three Little Birds, an Ajax staple with lyrics not entirely appropriate: there is plenty about which to worry, and for some every little thing is never going to be alright.

But somehow the sentiment felt right and the Mancunian contingent joined in with gusto, following it up with “We’ll never die,” – a song of defiance born from the ashes of the Munich air disaster and generally aired at the end of games, often when defeat is imminent. Last night it was needed from the outset, though this time its final line – “we’ll keep the red flag flying high, coz Man United will never die" – was not about a football team but a city, a spirit, and a way of life. 

Over the course of the night, every burst of song and even the minute's silence chorused with that theme: “Manchester, Manchester, Manchester”; “Manchester la la la”; “Oh Manchester is wonderful”. Sparse and simple words, layered and complex meanings.

The match itself was a curious affair. Rarely has it mattered so little whether or not United won; rarely has it been so special that they did. Manchester United do not represent or appeal to everyone in Manchester but they epitomise a similar brilliance to Manchester, brilliance which they take to the world. Brilliance like youthfulness, toughness, swagger and zest; brilliance which has been to the fore these last three days, despite it all.

Last night they drew upon their most prosaic aspects, outfighting and outrunning a willing but callow opponent to win the only trophy to have eluded them. They did not make things better, but they did bring happiness and positivity at a time when happiness and positivity needed to be brought; football is not “the most important of the least important things,” it is the least important of the most important things.

0800 7318496