In 2014, as the pharmaceutical giant Pfizer sought to take over AstraZeneca, the UK’s second largest pharmaceutical company, the British government insisted it would not intervene. David Cameron and George Osborne suggested that the bid was purely a commercial matter for shareholders and refused to apply a “public interest test”. When the takeover ultimately failed, the survival of a strategically crucial British company was rightly celebrated.
Oxford University chose to partner with AstraZeneca last April as it looked to develop a coronavirus vaccine. The UK government ordered 100 million doses long before the efficacy of the vaccine had been established. This decision has appeared ever more prescient with time: a Covid-19 vaccine was duly developed and UK citizens have had a guaranteed domestic supply, impervious to export controls of the kind the EU has erratically proposed. There is such a thing, it transpires, as the national interest – and it is not measured by shareholder value alone.
AstraZeneca’s defeat of a foreign takeover was notable for being so rare. As we have written many times, no other major Western country has allowed so many of its strategic industries and pre-eminent companies to fall into foreign ownership. One thinks of British Steel (sold to the Chinese firm Jingye for £50m in 2019), Jaguar Land Rover (acquired by India’s Tata Group in 2008) and Imperial Chemical Industries (sold to the Dutch company AkzoNobel in 2008). In succession, the UK government privatised British Telecom, British Gas, British Airways and Royal Mail. Many of our railway “franchises” are owned by rival nation states.
[See also: Could the UK’s Covid-19 vaccine approach become a global standard?]
The defects that the UK has long suffered from – a lack of manufacturing capacity, a dearth of public investment, an absence of strategic planning, poor productivity, short-termism – have been mercilessly exposed by the pandemic. After a decade of austerity, enfeebled local authorities were marginalised as the test and trace system was outsourced to private companies such as Serco and G4S. But the exorbitant contracts negotiated by the government have not delivered results. Though executives from the Boston Consulting Group were paid day rates of around £7,000 – the equivalent of an annual salary of £1.5m – the test and trace programme has become a symbol of incompetence and waste.
The vaccine roll-out, by contrast, is a model of the public-private innovation that the state can nurture. The Jenner Institute at Oxford University, which led vaccine research, was founded in 1998 as a partnership between the government, industry and academia. Rather than overpaid consultants, the vaccine roll-out has been led by NHS managers, medical professionals and 30,000 volunteers.
When the US president Bill Clinton declared in 1996 that “the era of big government is over”, many liberals on the left and the right nodded in agreement. Though the state would still fund essential public services, it would no longer direct the economy in any meaningful sense. In most respects, the private sector was deemed inherently superior.
But the Covid-19 pandemic, similar to the 2008 financial crisis before it, has shown the virtues of an active state: one that protects the public realm, oversees essential national infrastructure and challenges private cartels and monopolies. After years of liberal insouciance, this truth is finally being grasped across the ideological spectrum.
Politicians of all parties, for instance, now rightly ask why the UK was left dependent on China’s Huawei for 5G technology. The dysfunctional rail franchising system has for now been replaced with de facto nationalisation by a Conservative government.
The state is not an invariably progressive or competent actor. Healthy economies and societies depend upon a plurality of forms: innovative businesses, cooperatives, mutuals, trusts and public benefit companies. But in an era of permanent crisis, the state will be continually roused to perform its most essential duty: the protection of its citizens.
[See also: How austerity economics is hindering Covid-19 vaccine programmes]
This article appears in the 03 Feb 2021 issue of the New Statesman, Europe’s tragedy