![]() ![]() ![]() For Labour to fix this with more competition will only yield even more of a shift of the resources to the well-offĪnd after the biggest privatisation programme of any rich capitalist country, we have a regime of businesses that rely on subsidy and shelter from competition: foreign train operators that enjoy lovely returns for little cash while getting billions of investment from the public the energy oligopoly and its confusion pricing BT charging taxpayers extortionate sums for hooking up the countryside to broadband.Ĭalling this a competitive, dynamic private sector is the real magical thinking, and in subscribing to it Labour is committing a giant act of self-harm – because it’s the party’s natural supporters who are worst served by it. What the crash has revealed is a malfunctioning economic model held together by the public sector: creating jobs where the private sector can’t bailing out the banks when they come knocking subsiding companies with £93bn a year of grants and tax breaks. New Labour’s fallback was the creation of many more public sector jobs and quasi-public sector jobs in the north-east and Wales – which just about worked until this decade of austerity and the culling of the public sector. The creative industries so beloved of Blair have provided small employment in just a handful of cities – computer games in Dundee, media in Manchester, everything else in London. What about the sectors that were meant to fill in where the rustbelt left off? As the Bank of England’s Andy Haldane shows, finance barely created any new jobs, even during the great boom that ran until 2008. Our workforce increasingly competes on price, not skill – and that’s not a competition any western country can win for long. British industry is now largely a branch plant for other countries’ multinational firms – everything from Canadian train-maker Bombardier to US-owned carmaker Vauxhall. Seen this way, British carmaking is less world-beating success and more the automotive equivalent of a giant Ikea assembler: sticking together flatpack motors, with most of the parts made elsewhere.Īll this is a product of the dismantling of our manufacturing base that Margaret Thatcher began and Tony Blair continued. Yet Richard Parry-Jones, until recently chair of the Automotive Council and former senior Ford executive, estimates that just under two out of every three components of cars supposedly made in Britain actually come from abroad. Take the car industry, held up by frontbenchers on all sides as proof that it doesn’t matter that no big British-owned auto firms exist any more – we still make the damned things. ‘From Andy Burnham through to Yvette Cooper, the main candidates are countering the myth of Labour’s debt with the fantasy of matching Cameron’s cuts’. Then consider what it is that British manufacturers actually do. Politicians claim the UK remains an industrial country – but look at manufacturing per head, and the UK ranks well below the rest of the G7, and even such renowned powerhouses as Switzerland and Finland. The same self-deception goes on when talking about Britain’s manufacturing base. While they talked, I remembered official statistics showing that while back in 1979, the UK was one of the most research-intensive economies in the world, we have now been comprehensively overtaken by the US, Japan, France and Germany. Last week I listened to one of the would-be leaders rhapsodise about how the UK could become a shiny, hi-tech economy, if only it spent more on science. Then there is the really big question of how Britain is to pay its way in the world. But from Andy Burnham through to Yvette Cooper, the main candidates are now countering the myth of Labour’s debt with the fantasy of matching Cameron’s cuts – and the public is unlikely to be fooled. Inevitable, perhaps, coming after an election that was won by the party of austerity. The frontrunners scrap over who is most pro-business, or who can dream up the biggest spending cuts. You hear it over and over during Labour’s leadership campaign. MPs preach from this itall-encompassing belief system every day, using the dead language of competition and championing business. ![]()
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