The devastating news that Honda is closing its Swindon plant, amounting to a potential 3,500 job losses by 2022, is a huge blow to the workers and their communities. It’s a grave reminder that, despite “industrial strategy” becoming an in-vogue topic among UK politicians since the financial crash, action has not matched the rhetoric. Economic policy over the same period has remained much the same, locked into a “market knows best” mind-set – and, Swindon, as it stands, is the latest area to suffer the consequences.
It is encouraging to see that Unite the union is entering a period of meaningful consultations with the Honda management to examine in detail the business case put forward (although that word “meaningful” is crucial here).
By contrast, the attempts to engage from government have been lacking in substance, as one commentator put it, industrial strategy minister Greg Clark would “say anything to secure a single day’s headline”.
In the wake of Honda’s announcement, many have pointed to the economic insecurity created by the poorly managed negotiations on the UK’s future relationship with the EU. Though the Brexit uncertainties and unwillingness of government to rule out a no deal is likely to have had a role in the decision of the firm to close the plant, successive governments and ministers presiding over a managed decline of the UK’s productive industries more broadly must not be let off the hook. Brexit is just the most pressing of a constellation of forces – from the imperative to switch to cleaner business models, to automation and changing trade relationships – that should mark the permanent end to hands-off, market-first industrial policy.
Put bluntly, there has been a marked failure to make the UK fit for purpose in a world of rapid emissions cuts. As new markets are made and old markets die off, only government, with a joined up transition plan involving unions, can bridge the gap. Last year Unite passed an emergency motion at its annual conference calling on the government to ensure any ambitious carbon-use reduction targets are made with proper consultation, and a plan for meeting them made with both the industry and workers affected – so ensuring a just transition to new technologies.
Despite apparent support for the creation of centres of excellence in the UK for the electrification of vehicles, government hasn’t put its money where its mouth is. Instead of seizing new opportunities presented by new technologies such as these, for decades now the UK has seen a decline in manufacturing compared to other sectors of the economy and the manufacturing sectors of other countries.
Industrial change that damages certain sectors, regions and livelihoods is a conscious policy decision – and one we need to move beyond. In addition to the ongoing talks with Unite, the notice, three years ahead of the proposed closure, should mean a concerted process of local industrial planning is set in train for the future of the plant and its employees, led by the workers themselves and local decision-makers. Jobs that replace any lost must be fit for the environmental needs of the 21st century, unionised, and well paid.
At the New Economics Foundation we are looking into new approaches to social and labour market policy that will help to ameliorate subsequent, and in some cases inevitable, industrial transformations. Be it a shorter working week with incomes protected as part of a rebooted Green New Deal, or an overhaul of our social security system so that it’s fit for protecting people – and the wider economy – in periods of instability.
Alice Martin is head of work and pay at the New Economics Foundation. She tweets @AlicePMartin.