Tories stranded with no plan for growth, and no vision of Britain’s industrial future

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Tories stranded with no plan for growth, and no vision of Britain’s industrial future

By The Labour Party ⋅ March 17, 2010 ⋅ Post a comment
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Labour publishes A Future Fair for All: New industries, future jobs.

Labour today publishes A Future Fair for All: New industries, future jobs, which sets out Labour’s policies for long term economic success and highlights the risk posed by the Tories’ old-fashioned ideological rejection of any role for government in equipping our firms and people for a global economy.

To read a copy of A Future Fair for All: New industries, future jobs please click here.

Peter Mandelson, Labour’s Business Secretary, writes in the foreword:

“For a decade with Labour, Britain’s economy grew strongly. But the global banking crisis is a stark reminder that growth cannot be taken for granted, and the foundations of the economy must be strong.

“Our long term economic success depends on a balanced British economy and the ability of our businesses and our people to compete for high-skilled jobs in the industries of the future. Sophisticated services, modern advanced manufacturing, the creative industries, the life sciences: all examples of where British firms lead the world.

“Labour believes that the Government must play a supportive role in helping business succeed. Government invests in the infrastructure, helps fund the science and research and helps invest in the skills. The Tories believe that government can only get in the way.

“For thirteen years Labour has invested in Britain’s future. It has renewed our university system to its highest ever global standing. It refused to accept the inevitable decline of our regional economies, but invested successfully in their renewal. It has worked with business to create an environment that is ranked best in Europe for running a company and second only to the US as a magnet for foreign investment.

“For the future Labour wants to build on these strong foundations. We are committed to a greener, smarter, even more skilled Britain. One that generates more knowledge and is better than anyone else at turning that knowledge into innovation and economic growth. One that exports more and invests more. One at the cutting edge of technology and the transition to low carbon and clean energy.

“Our industrial activism agenda has invested in all of these strengths. The Tories’ old-fashioned ideological rejection of any role for government in equipping our firms and people for a global economy have left them stranded with no plan for growth, and no vision of Britain’s industrial future.”

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Discussion

View Comments for “Tories stranded with no plan for growth, and no vision of Britain’s industrial future”

HJ

The problem with this argument is that Labour’s “industrial activism agenda” hasn’t worked over the last 13 years.

According to the ONS, industrial output is now 12% lower than in 1997. It grew by over 20% under the last Conservative government.

Perhaps it is better for governments to leave well alone and to concentrate on not increasing (and, indeed, on reducing) the costs faced by industries which have to compete internationally. Firms are rather better at knowing what they need to equip themselves for the future than are governments (few in government have much industrial experience), but are less able to do this if government takes their money and insists on doing it for them.
http://www.labourmatters.com/ Labour Matters

It is disingenuous to claim that industrial output grew under the last Tory government without mentioning the fact that it fell dramatically for two years previously during John Major’s recession. In fact, while total output was 11% above its pre-recession peak by 1997, manufacturing output was just 3 1/4% above its previous peak and only 8% above the level reached in 1974. Whole economy investment was still 2 1/4% lower in 1997 than when Major’s recession began.

Similarly, Labour’s industrial activism is the result of the urgent need to recover from the global recession, during which industrial output fell off a cliff. Doing nothing isn’t a realistic path to recovery.
HJ

Well, Labour Matters, output of industries does tend to fall during recessions, by definition. It’s hardly disingenuous to compare the entire period of the two governments.

However, your figures are wrong and why do you compare with 1974 when the Tories were not in power from 1974 to 1979? If you want to compare with the Tories, you have to compare from 1979.

If you look at the ONS web site (statistics.gov.uk) and look at the Index of Production (IoP) figures for Manufacturing (seasonally adjusted)
CKYY IOP: D: Manufacturing: CVMSA
Seasonally adjusted
Constant 2005 prices
2005 = 100

You will see the following figures:
1974 – 87.1,
1979 – 84.5 (so output shrank under the last Labour government as well),
1997 – 97.9

The 1997 figure represents a growth of 15.8% since 1979 and 12.4% since your chosen comparison date of 1974. Not spectacular, but nevertheless worthwhile growth. The wider production figures (including energy, etc.) show a growth of over 20%.

The corresponding figure for 2009 is 88.1, i.e. a drop of 10% since 1997. Again, the wider IoP figures give a slightly larger but not dissimilar drop of around 12%.

However, what undermines your argument further is this: I think you’ll accept that when there is a change of government, it takes time for differing priorities and policies to take effect. Especially when you’re talking about investment, perhaps it might be around two to three years until new policies make any substantial difference. But in this case the contrast is even starker. Manufacturing output was already falling fast in 1979 when the Tories came to power and continued to fall until 1981/2, but thereafter it grew overall (albeit modestly if you calculate the average annual growth) , even if you include the Major (1991/2) recession.

Similarly, manufacturing output was growing in 1997 when Labour came to power. But from 2001 (Output = 101.8 ) to 2007 (Output = 102.2) it stagnated. Since then, of course, it has dropped substantially in the recession.

My point is that Labour’s industrial policies cannot claim that they produced any growth in manufacturing even prior to the current recession. So how can we have any confidence that they will now?
http://www.labourmatters.com/ Labour Matters

By your own figures there was growth until the recession. In fact, manufacturing output reached an all-time high in 2007, even adjusted for inflation. The UK is the world’s 6th largest manufacturer, but we need to recognise that the recession has hit manufacturing hard. That is why the Government needs to be helping our industrial future and not sitting on the sidelines as it struggles to recover.

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