Big-shed nation

They sit by the road, windowless and vast. But what are they for? Joe Moran on the warehouses, logis

A new word has entered the vocabulary of environmental protest: megashed. A well-organised "stop the shed" campaign is currently centring on a disused RAF airfield just outside Andover, next to the busy A303, where Tesco plans to build an enormous distribution warehouse. Yet big sheds - those huge, windowless warehouses you see at major road intersections - have been around for nearly 40 years, and for most of their history they have been left off maps, unmentioned and ignored by the general public. So why is a diverse band of campaigners - including the former transport secretary George Young and the lead singer of the Troggs, Reg Presley - suddenly getting angry about them?

If you thought about them at all, you probably imagined big sheds to be a product of the dere gulated planning regime of the Thatcher era; in fact, big sheds were pioneered by a socialist retail society and championed by a minister who would later become a tabloid demon from the hard left. In the late 1960s the Co-op hatched a plan to build huge warehouses that would serve whole regions and increase its bulk purchasing power. Anthony Wedgwood Benn, as the minister of technology was then known, awarded it a £150,000 innovation grant, in return for which it agreed to share its know-how with the industry. So in 1970, the Co-op built its first distribution centre at Birtley in County Durham, just off the A1. Birtley wasn't just huge, it was automated, with goods stacked on high racks reached by robotic cranes commanded by a giant ICI computer, allowing a then-astonishing 5,000 boxes an hour to be despatched to the shops.

The big-shed revolution really began in 1972 with the completion of the M6 and the linking up of the first thousand miles of motorway. LSSBs (large single-storey buildings) sprang up suddenly on low-lying land near motorways. Britain was losing its industrial base and importing more goods from abroad, and these imports needed more space to store them. The innovation of the Thatcher era was "just-in-time", a system first used by Toyota in Japan in the 1950s, which delivers goods only when they are needed, so they do not sit on a shelf losing value. By centralising their warehouse stock and keeping goods moving, firms could release cash flow, perhaps even sell things before they had to pay for them. Logistics, a trendier-sounding word than "haulage", was this new art of moving things around. Firms could outsource the whole operation, from finding warehouses to driving the juggernauts, to companies offering total "supply chain management solutions".

Logistics depended on location, and the property hot spot was right at the heart of the trunk-road system, in the Midlands. When the M69 from Leicester to Coventry opened in 1977, it created a "golden triangle" of motorways with the M1 and M6, giving the area the best transport links in Britain. From here, lorries could reach 92 per cent of the population and return the same day. Here is found Europe's biggest distribution park, the 500-acre Magna Park, founded in 1988 by an unlikely alliance of Asda and the Church of England. Companies that migrated there channelled their goods through the golden triangle to an extreme degree. Toyota's Magna Park warehouse, for example, was only 50 miles from its manufacturing plant at Burnaston near Derby. But instead of parts being shipped straight there, they were sent from Derby to its European distribution centre near Ghent in Belgium and then on to Magna Park - a journey of 583 miles - so the stock could be maintained at the minimum level.

Terminal architecture

Most of us might think this a strange way to run a business, but that just shows how little we know about the invisible workings of this big-shed economy. The late architectural critic Martin Pawley called these buildings "terminal architecture", meaning that they were hubs for the unseen networks that sustain and control our daily lives. Giving nothing away on the outside, big sheds just look like dumping grounds for goods, but they are far more dynamic than that: goods move at such a rate that they can arrive and leave within the space of a few hours. In the new internet-shopping warehouses, such as the Amazon shed near Junction 13 of the M1, hundreds of "pickers" run around mountains of Harry Potter books, Nintendo games and Duffy CDs, guided to their destinations by hand-held navigational systems within minutes of orders being placed online. The big shed is designed to get stuff on the road as quickly as possible.

So why is the megashed suddenly on the political agenda? Since the mid-1990s, the development of out-of-town shopping malls and retail parks has been more tightly controlled. But central government and regional assemblies have carried on giving free rein to the megasheds, because they see them as essential to support the boom in internet shopping and the ever-growing number of imports. Faced with rising land prices, the big shed is invading other areas of the country. One of the great beneficiaries has been UK Coal, because much of the land that it bought cheaply when British Coal was privatised in 1994 turns out to be conveniently located between the M1 and A1, with good connections to the newly important north-eastern ports. Some of the critical pits in the 1984-85 miners' strike - most poignantly, Rossington colliery, near Doncaster, nicknamed "Red Rosso" after its diehard support for the NUM - are being turned into distribution parks.

The supermarkets are now also expanding the megasheds into the regions, because they have so many stores that a single distribution centre in the Midlands is no good to them. Some of the newspaper reports about Tesco's Andover megashed suggested that it would be one of the biggest buildings in Europe. In fact, it is nowhere near as big as Heathrow's Terminal Five, and at 915,000 square feet will be a fairly standard-sized megashed. But since that is bigger than the footprint of the Millennium Dome, it is quite big enough. So omnipresent are the big sheds becoming that a state-sponsored quango called Community Resilience UK has plans, in the event of a natural disaster or major terrorist attack, to requisition them as emergency mass mortuaries.

Antony Gormley, one of the few people to find aesthetic interest in the Daventry International Rail Freight Terminal, says that mega sheds are "as much a part of our history as the rural barn". As works of architecture, they are more cutting-edge than any giant Gherkin. Built quickly from prefab materials, big sheds are as impermanent and recyclable as garden sheds - the steel walls and roofs can be melted down for scrap, the concrete floors broken up and used as hardcore for roads. Some are built by "clad racking", which means simply plonking all the equipment on site and covering it with a plastic membrane, instead of walls. If only our houses could be built so cheaply and innovatively.

Yet big sheds also encapsulate the strange ethereality of the modern economy, the way it controls our lives while we have only the dimmest awareness of its workings. The recent banking crises, or the chaos at Terminal Five, do not seem to have shaken the baffling political consensus that the private sector is a paradigm of competence and efficiency - even though anyone who has ever rung a call centre, or waited in for something to be delivered, will know that the so-called "service" economy is more than capable of surly incompetence. But the big-shed universe is super-efficient at all the stuff that happens before the pesky customers get in the way: finding warehouse locations, cutting margins, working out how much the shipping will cost in pounds per cubic metre.

Britain is the world leader at moving stuff around. As the rest of us know so little about it, this logistics economy could largely ignore all the voguish talk about local sourcing and carbon footprints, and get on with what it does best: searching for limitless economies of scale. Until now, perhaps, when the megasheds are becoming so big that we are noticing them at last.

"Queuing for Beginners" by Joe Moran is published by Profile Books (£8.99)

This article first appeared in the 18 August 2008 issue of the New Statesman, Superpower swoop

Jeremy Corbyn. Photo: Getty
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Lexit: the EU is a neoliberal project, so let's do something different when we leave it

Brexit affords the British left a historic opportunity for a decisive break with EU market liberalism.

The Brexit vote to leave the European Union has many parents, but "Lexit" – the argument for exiting the EU from the left – remains an orphan. A third of Labour voters backed Leave, but they did so without any significant leadership from the Labour Party. Left-of-centre votes proved decisive in determining the outcome of a referendum that was otherwise framed, shaped, and presented almost exclusively by the right. A proper left discussion of the issues has been, if not entirely absent, then decidedly marginal – part of a more general malaise when it comes to developing left alternatives that has begun to be corrected only recently, under Jeremy Corbyn and John McDonnell.

Ceding Brexit to the right was very nearly the most serious strategic mistake by the British left since the ‘70s. Under successive leaders Labour became so incorporated into the ideology of Europeanism as to preclude any clear-eyed critical analysis of the actually existing EU as a regulatory and trade regime pursuing deep economic integration. The same political journey that carried Labour into its technocratic embrace of the EU also resulted in the abandonment of any form of distinctive economics separate from the orthodoxies of market liberalism.

It’s been astounding to witness so many left-wingers, in meltdown over Brexit, resort to parroting liberal economics. Thus we hear that factor mobility isn’t about labour arbitrage, that public services aren’t under pressure, that we must prioritise foreign direct investment and trade. It’s little wonder Labour became so detached from its base. Such claims do not match the lived experience of ordinary people in regions of the country devastated by deindustrialisation and disinvestment.

Nor should concerns about wage stagnation and bargaining power be met with finger-wagging accusations of racism, as if the manner in which capitalism pits workers against each other hasn’t long been understood. Instead, we should be offering real solutions – including a willingness to rethink capital mobility and trade. This places us in direct conflict with the constitutionalised neoliberalism of the EU.

Only the political savvy of the leadership has enabled Labour to recover from its disastrous positioning post-referendum. Incredibly, what seemed an unbeatable electoral bloc around Theresa May has been deftly prized apart in the course of an extraordinary General Election campaign. To consolidate the political project they have initiated, Corbyn and McDonnell must now follow through with a truly radical economic programme. The place to look for inspiration is precisely the range of instruments and policy options discouraged or outright forbidden by the EU.

A neoliberal project

The fact that right-wing arguments for Leave predominated during the referendum says far more about today’s left than it does about the European Union. There has been a great deal of myth-making concerning the latter –much of it funded, directly or indirectly, by the EU itself.

From its inception, the EU has been a top-down project driven by political and administrative elites, "a protected sphere", in the judgment of the late Peter Mair, "in which policy-making can evade the constraints imposed by representative democracy". To complain about the EU’s "democratic deficit" is to have misunderstood its purpose. The main thrust of European economic policy has been to extend and deepen the market through liberalisation, privatisation, and flexiblisation, subordinating employment and social protection to goals of low inflation, debt reduction, and increased competitiveness.

Prospects for Keynesian reflationary policies, or even for pan-European economic planning – never great – soon gave way to more Hayekian conceptions. Hayek’s original insight, in The Economic Conditions of Interstate Federalism, was that free movement of capital, goods, and labour – a "single market" – among a federation of nations would severely and necessarily restrict the economic policy space available to individual members. Pro-European socialists, whose aim had been to acquire new supranational options for the regulation of capital, found themselves surrendering the tools they already possessed at home. The national road to socialism, or even to social democracy, was closed.

The direction of travel has been singular and unrelenting. To take one example, workers’ rights – a supposed EU strength – are steadily being eroded, as can be seen in landmark judgments by the European Court of Justice (ECJ) in the Viking and Laval cases, among others. In both instances, workers attempting to strike in protest at plans to replace workers from one EU country with lower-wage workers from another, were told their right to strike could not infringe upon the "four freedoms" – free movement of capital, labour, goods, and services – established by the treaties.

More broadly, on trade, financial regulation, state aid, government purchasing, public service delivery, and more, any attempt to create a different kind of economy from inside the EU has largely been forestalled by competition policy or single market regulation.

A new political economy

Given that the UK will soon be escaping the EU, what opportunities might this afford? Three policy directions immediately stand out: public ownership, industrial strategy, and procurement. In each case, EU regulation previously stood in the way of promising left strategies. In each case, the political and economic returns from bold departures from neoliberal orthodoxy after Brexit could be substantial.

While not banned outright by EU law, public ownership is severely discouraged and disadvantaged by it. ECJ interpretation of Article 106 of the Treaty on the Functioning of the European Union (TFEU) has steadily eroded public ownership options. "The ECJ", argues law professor Danny Nicol, "appears to have constructed a one-way street in favour of private-sector provision: nationalised services are prima facie suspect and must be analysed for their necessity". Sure enough, the EU has been a significant driver of privatisation, functioning like a ratchet. It’s much easier for a member state to pursue the liberalisation of sectors than to secure their (re)nationalisation. Article 59 (TFEU) specifically allows the European Council and Parliament to liberalise services. Since the ‘80s, there have been single market programmes in energy, transport, postal services, telecommunications, education, and health.

Britain has long been an extreme outlier on privatisation, responsible for 40 per cent of the total assets privatised across the OECD between 1980 and 1996. Today, however, increasing inequality, poverty, environmental degradation and the general sense of an impoverished public sphere are leading to growing calls for renewed public ownership (albeit in new, more democratic forms). Soon to be free of EU constraints, it’s time to explore an expanded and fundamentally reimagined UK public sector.

Next, Britain’s industrial production has been virtually flat since the late 1990s, with a yawning trade deficit in industrial goods. Any serious industrial strategy to address the structural weaknesses of UK manufacturing will rely on "state aid" – the nurturing of a next generation of companies through grants, interest and tax relief, guarantees, government holdings, and the provision of goods and services on a preferential basis.

Article 107 TFEU allows for state aid only if it is compatible with the internal market and does not distort competition, laying out the specific circumstances in which it could be lawful. Whether or not state aid meets these criteria is at the sole discretion of the Commission – and courts in member states are obligated to enforce the commission’s decisions. The Commission has adopted an approach that considers, among other things, the existence of market failure, the effectiveness of other options, and the impact on the market and competition, thereby allowing state aid only in exceptional circumstances.

For many parts of the UK, the challenges of industrial decline remain starkly present – entire communities are thrown on the scrap heap, with all the associated capital and carbon costs and wasted lives. It’s high time the left returned to the possibilities inherent in a proactive industrial strategy. A true community-sustaining industrial strategy would consist of the deliberate direction of capital to sectors, localities, and regions, so as to balance out market trends and prevent communities from falling into decay, while also ensuring the investment in research and development necessary to maintain a highly productive economy. Policy, in this vision, would function to re-deploy infrastructure, production facilities, and workers left unemployed because of a shutdown or increased automation.

In some cases, this might mean assistance to workers or localities to buy up facilities and keep them running under worker or community ownership. In other cases it might involve re-training workers for new skills and re-fitting facilities. A regional approach might help launch new enterprises that would eventually be spun off as worker or local community-owned firms, supporting the development of strong and vibrant network economies, perhaps on the basis of a Green New Deal. All of this will be possible post-Brexit, under a Corbyn government.

Lastly, there is procurement. Under EU law, explicitly linking public procurement to local entities or social needs is difficult. The ECJ has ruled that, even if there is no specific legislation, procurement activity must "comply with the fundamental rules of the Treaty, in particular the principle of non-discrimination on grounds of nationality". This means that all procurement contracts must be open to all bidders across the EU, and public authorities must advertise contracts widely in other EU countries. In 2004, the European Parliament and Council issued two directives establishing the criteria governing such contracts: "lowest price only" and "most economically advantageous tender".

Unleashed from EU constraints, there are major opportunities for targeting large-scale public procurement to rebuild and transform communities, cities, and regions. The vision behind the celebrated Preston Model of community wealth building – inspired by the work of our own organisation, The Democracy Collaborative, in Cleveland, Ohio – leverages public procurement and the stabilising power of place-based anchor institutions (governments, hospitals, universities) to support rooted, participatory, democratic local economies built around multipliers. In this way, public funds can be made to do "double duty"; anchoring jobs and building community wealth, reversing long-term economic decline. This suggests the viability of a very different economic approach and potential for a winning political coalition, building support for a new socialist economics from the ground up.

With the prospect of a Corbyn government now tantalisingly close, it’s imperative that Labour reconciles its policy objectives in the Brexit negotiations with its plans for a radical economic transformation and redistribution of power and wealth. Only by pursuing strategies capable of re-establishing broad control over the national economy can Labour hope to manage the coming period of pain and dislocation following Brexit. Based on new institutions and approaches and the centrality of ownership and control, democracy, and participation, we should be busy assembling the tools and strategies that will allow departure from the EU to open up new political-economic horizons in Britain and bring about the profound transformation the country so desperately wants and needs.

Joe Guinan is executive director of the Next System Project at The Democracy Collaborative. Thomas M. Hanna is research director at The Democracy Collaborative.

This is an extract from a longer essay which appears in the inaugural edition of the IPPR Progressive Review.

 

 

This article first appeared in the 18 August 2008 issue of the New Statesman, Superpower swoop