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How the government's industrial strategy could steal your job

The industrial strategy aims to boost productivity and spread growth. But this is not the same as a well-paid job.  

Not long ago, a musician friend of mine told me about a lucrative gig. Instrumentalists were being paid to come to a recording studio, and simply play every note of a scale. The pay was good. There was only one thing that made my friend uneasy – once the project was done, the man behind it would have a recording of every orchestral instrument playing every note. And thanks to the wonders of digital technology, he’d never need to hire a live musician again. 

The government’s industrial strategy is one of the great hopes of Brexit. Pumping money into infrastructure, research, and business support has stoked dreams of reindustrialisation. The Labour donor and industrialist John Mills, who has long investigated the decline in British manufacturing, is calling for further action. He believes a further devaluation in the pound, to around $1.05, could tip the balance in favour of the home grown makers. 

Meanwhile, the Prime Minister has made it clear that the government will prioritise controls over immigration in the Brexit negotiations. Those who believe that unskilled immigrants have pushed down wages (the evidence is mixed) can expect any new jobs created to go to British workers.

But here is the question that still needs answered. What is the definition of industrial strategy success?

According to the government’s green paper, it is launching the strategy in order to enable “stronger productivity and more balanced growth”. These are laudable aims. Put simply, productivity is the ratio of what you get out compared to what you put in, and Britain isn’t good at it. But I am yet to come across an example of a struggling, northern, small-town Labour voter who said they voted Leave because of "the value added per employee". The Brexit post-mortem has revealed deep fears about employment security, the quality of jobs and the way culture and industry overlap. Productivity is not the same thing. 

Britain’s manufacturing heritage is told through faded photos of workers on assembly lines, or operating basic tools. But that was the 1970s, and in the 21st century, a factory has a lot more robots. Using robots raises productivity by 0.37 per cent, according to a recent LSE/Uppsala study, and we are still in the early stages of development. Surely any 21st century, productive, British entrepreneur worth his or her salt would embrace automation?

Whether or not robots and other automated processes steal jobs is up for debate – just as immigration is. The Bank of England’s chief economist believes robots will replace nearly half of all British workers in the next two decades. (Mills, for his part, argues that robots can never replace humans in certain sectors, like caring). What we do know, is that Foxconn, which makes Apple and Samsung components in China, replaced 60,000 factory workers with robots in 2016.

Conversely, one of the explanations for Britain’s “productivity puzzle” is that since the recession, firms have tried to avoid making good employees redundant. In other words, they have chosen humans over machines. “Firms have had incentives to substitute cheaper workers for more expensive machinery and buildings,” is how the Royal Economic Society put it in 2014. Silicon Roundabout’s “disrupters” may wince at such disregard for progress. But since unemployment leads to the erosion of skills, reliance on public services and the disintegration of the community, it’s worth putting productivity in context. 

The industrial strategy may well stimulate local economies, inspire entrepreneurs in forgotten small towns and provide some backbone in the uncertain Brexit negotiations ahead. But it will not be a return to the past. And with freedom of movement scrapped, if the workers of post-industrial Britain find they are still lacking quality manufacturing jobs, they won’t have immigrants to blame. 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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PMQs review: Jeremy Corbyn prompts Tory outrage as he blames Grenfell Tower fire on austerity

To Conservative cries of "shame on you!", the Labour leader warned that "we all pay a price in public safety" for spending cuts.

A fortnight after the Grenfell Tower fire erupted, the tragedy continues to cast a shadow over British politics. Rather than probing Theresa May on the DUP deal, Jeremy Corbyn asked a series of forensic questions on the incident, in which at least 79 people are confirmed to have died.

In the first PMQs of the new parliament, May revealed that the number of buildings that had failed fire safety tests had risen to 120 (a 100 per cent failure rate) and that the cladding used on Grenfell Tower was "non-compliant" with building regulations (Corbyn had asked whether it was "legal").

After several factual questions, the Labour leader rose to his political argument. To cries of "shame on you!" from Tory MPs, he warned that local authority cuts of 40 per cent meant "we all pay a price in public safety". Corbyn added: “What the tragedy of Grenfell Tower has exposed is the disastrous effects of austerity. The disregard for working-class communities, the terrible consequences of deregulation and cutting corners." Corbyn noted that 11,000 firefighters had been cut and that the public sector pay cap (which Labour has tabled a Queen's Speech amendment against) was hindering recruitment. "This disaster must be a wake-up call," he concluded.

But May, who fared better than many expected, had a ready retort. "The cladding of tower blocks did not start under this government, it did not start under the previous coalition governments, the cladding of tower blocks began under the Blair government," she said. “In 2005 it was a Labour government that introduced the regulatory reform fire safety order which changed the requirements to inspect a building on fire safety from the local fire authority to a 'responsible person'." In this regard, however, Corbyn's lack of frontbench experience is a virtue – no action by the last Labour government can be pinned on him. 

Whether or not the Conservatives accept the link between Grenfell and austerity, their reluctance to defend continued cuts shows an awareness of how politically vulnerable they have become (No10 has announced that the public sector pay cap is under review).

Though Tory MP Philip Davies accused May of having an "aversion" to policies "that might be popular with the public" (he demanded the abolition of the 0.7 per cent foreign aid target), there was little dissent from the backbenches – reflecting the new consensus that the Prime Minister is safe (in the absence of an attractive alternative).

And May, whose jokes sometimes fall painfully flat, was able to accuse Corbyn of saying "one thing to the many and another thing to the few" in reference to his alleged Trident comments to Glastonbury festival founder Michael Eavis. But the Labour leader, no longer looking fearfully over his shoulder, displayed his increased authority today. Though the Conservatives may jeer him, the lingering fear in Tory minds is that they and the country are on divergent paths. 

George Eaton is political editor of the New Statesman.

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