Making Things

May 21, 2012 1:13 pm

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There have been many calls for a plan for growth in recent months but less detail on what it might entail.

In a pamphlet published today by Policy network I argue that making things should be a big part of a plan for growth.

Making things creates jobs, has spin off effects in supplier companies and contributes to exports.

It also has effects beyond the economic.  Political disaffection is related to economic disaffection, to the sense that too many have been written out of our national story.  The standard political response, to talk about how we need to do politics differently or change the rules to “reconnect” misses this point.

Two common reactions should be avoided when we talk about making things.  The first is to indulge in an orgy of blame about who is responsible for Britain’s industrial “decline”.  The second is to regard doing anything about it as nostalgia, a futile desire to turn back the clock.

Both reactions are what I would call “declinism” – a defeatist reaction to our ability to make things.

Of course we make less than we used to, but we also make more than we think.  In sectors like automotive, aerospace and pharmaceuticals, Britain is strong.  We are also world leaders in music and creative industries and we should regard these things as making things too.  Britain has both a traditional manufacturing capacity and a great ability to make products you can’t see or touch but which still create wealth and jobs and contribute enormously to our positive self image abroad.

It is possible for Britain to reject “declinism” and do more of making things if we understand what we are good at and what we are not, appreciate our assets and put the right things in place.  But it won’t happen by accident.  It will take will and work to make it happen.

I suggest five things we could do to help with more of making things.

First, equip people to do the jobs.  There are still too many young people leaving school without the skills and qualifications they need.  Educational underperformance destroys opportunity and addressing it should be a national passion, particularly for the centre left.  And it isn’t just results that need to change – it is also what we regard as the successful high prestige career.  Why should engineering not be valued as much as law or accountancy?

Second, we must remain an open society.  There is no point in saying Britain is open for business if we are constantly sending out signals that we don’t want the brightest students or the smartest workers from around the world.  Britain is a creative innovative society because it is an open society and if we cut ourselves off from talent it will have a damaging economic impact.

Third, Government has to play its role.  Culture change is needed in Whitehall.  There is no point in calling for an industrial strategy if we don’t have the capacity to deliver it.  This is not about attacking civil servants.  It is about changing the job description of government departments.  The Department of Business should become a powerful department of the micro economy but even then it can’t do the job alone.  Other departments have to think more about the impact of their activities on UK PLC.

We also need to pay as much attention to the supply chain – the ecosystem of making things, or what has sometimes been called the “industrial commons” as we do to the big well known names.  Well known companies depend on hundreds, sometimes thousands of small suppliers.  They are interconnected and depend on one another.  The whole eco system needs our attention.

Fourth, making things needs finance.  Our banking sector is still recovering from the collapse of 2008.  New entrants may help but new institutions such as a British Investment Bank could also make a difference, by concentrating on long term returns, infrastructure projects and taking a wider view than exists in conventional lending.

Finally, we need to broaden our definition and believe we can do it.  It is time to restore making things as part of our own self image of what Britain does as a country.  It isn’t just part of our past.  It’s part of our future too.

Pat McFadden is Labour MP for Wolverhampton South East. Making Things is available here.

  • treborc1

    As we have been saying for a life time now go tell Miliband.

  • http://twitter.com/SteveMcCarthyH SteveMcCarthyHunt

    Right. So, in order, more dumbed down qualifications, more at university, more immigration, more involvement by the government (ie red tape, so more civil servants), more banker bashing and more borrowing. Yeah, really useful that, Pat…. (slow handclap).

    In short, absolutely sod all difference to what got us into this mess in the first place from either Labour or Tory governments over the last thirty years. Nothing about immigration control, nothing about how the likes of multinational BAe holds us to ransom even though it has less than 10% of its workforce and business here, nothing about attracting international manufacturing businesses, nothing about tax reform, nothing about critical national infrastructure upgrades that are necessary, but you’d happily endorse the utterly useless HS2 vanity project.

    and to think, people are actually dumb enough to buy these meaningless empty, hollow platitudes as well…. theres obviously one born every minute in Wolverhampton…

    • treborc1

      So what do we do, do we expect to return to the banking industry being the mainstay of the finances of the UK. We are going to have to find the jobs for the young and the elderly we expect to work until death.

      I do not see Miliband and his cohorts saying to much, and I see the Tories saying even less, so it’s nice to see somebody thinking of something.

  • Dave Postles

    ”Coalition of Resistance welcomes the
    TUC’s decision to call a national demonstration against austerity in
    the autumn around the slogan “for a future that works”. Last week the TUC agreed on working toward the 20th October 2012 as the date for the demonstration.’

    • hp

      ‘demonstration against austerity’?
      What austerity?
      The UK is running a budget deficit.  Hardly austere is it?
      Runing up an ever-growing national debt.
      We should be thanking our lucky stars that the debt interest is relatively low.
      Otherwise we would be paying more on debt interest than we do on Education.
      It already costs us more than Defence.

  • LordElpus

    When Labour came to power in 1997 Manufacturing contributed 20% of the GDP of the UK, when Labour left power in 2010 Manufacturing contributed 13% of the GDP of the UK.

    Considering you’ve been a Labour MP since 2005 and a Minister for Business etc from 2007 – 2010 does it not now seem hypocritical to be calling for the present government to provide the foundations needed to start making things to enable growth when your government succeeded in the opposite.

    • http://twitter.com/mistyblulabour dave stone

      It’s going to fall further.

      Plus, the financial sector is no longer viable as an alternative and the days of consumerism financed by private debt are long gone.

      And what does Cameron do? Nothing.

      Of interest:
      http://yaleglobal.yale.edu/content/global-economy-danger 

  • Daniel Speight

    Two common reactions should be avoided when we talk about making
    things.  The first is to indulge in an orgy of blame about who is
    responsible for Britain’s industrial “decline”…

    BUT not learn from history is stupidity. You must look at why things turned out so differently in Britain than in Germany  and France. Identify what went wrong and then you stand half a chance. Too many will think you are just trying to avoid your share of the blame.

    • Bill Lockhart

       I suggest  that what went wrong was the aftermath of WW2- exhaustion, debt and a certain measure of triumphalist complacency which quite inexplicably persists today. The factories were still standing, and we had won. Why change anything? This led to two decades of  Luddite  underinvestment in plant and skills on the managerial side and to sullen and obstructive “entitlement” on the shop floor. Meanwhile Germany (and France and Italy) had to start again from scratch, which meant new machinery and training, and they had to export to survive as their home markets were recovering from utter devastation. We had Marshall Plan money too, of course- far more than those countries- but we squandered it while they invested it.

      Fascinating, horrifying and devastating examination here-

       http://www.bbc.co.uk/history/british/modern/marshall_01.shtml

      • Daniel Speight

        Yes Bill, we can see political mistakes made immediately after the war. Myself I would point to the failure during the nationalizations that were needed in some industries like coal and the railways to give workers a say in the running of these new state companies, thereby leaving the ‘them and us’ attitude in place. The opposite idea was followed in Germany, even with private companies, and following in some cases British advisers’ suggestions. Who was to blame for this mistake? Probably some of our Labour heroes from that time like Bevin and Morrison.

        BUT the mistakes made in 1945 are miniscule compared the damage done to industry by politicians in the 70s. Here again we can look at France which also had militant unions, many part of a Communist Party controlled organization. Yet somehow they came through it with a far stronger manufacturing base than Britain. Why is that if not for the deindustrialization of Britain engineered by Tories and their neo-liberal gurus.

        That 13 years of New Labour did so little to repair the damage done will be to Labour’s shame for a long time. And if the two Eds need a lesson in where failure to take the right path leads a social-democratic party, they need look no further than Labour’s sister party in Greece, PASOK.

      • Peter Barnard

        @ Bill L,

        From British Economic Growth 1856-1973 (Matthews, Feinstein, Odling -Smee, Stanford University Press, 1982) :

        (i) the growth rate of the fixed capital stock in the postwar period, whether measured gross or net, was higher than in any previous period (ii) at fixed prices, gross domestic fixed assets more than doubled between 1951 and 1973 – a compound growth rate of 3.3 % per annum.

        This compares with 2.5% pa (1856-1873), 2.4% pa (1873-1913) and 1.1% pa (1924-1937).

        As I understand Marshall Plan money, before the money was released, a plan had to be submitted and approved before the money was released. I canot imagine that the US would have released the money for “squandering.” Perhaps, you have details/numbers on how the money was actually spent?

        • Peter Barnard

          And, Bill L, the manufacturing index grew from 38.1 in 1948 to 76.8 in 1968 (2005 = 100) : a compound growth rate of 3.6% per annum.

          • Peter Barnard

            And there’s more, Bill L, this time from C H Feinstein’s monumental work, “National Income, Expenditure and Output of the United Kingdom, 1855-1965″ :

            In constant £1958, total gross domestic fixed capital formation grew from £2,135 million in 1948 to £2,469 million in 1951 : plus 15.6%.

            In manufacturing and construction, GDFCF was up from £554 million to £768 million : plus 39%

            In gas, elec and water : £206 million to 284 million : plus 38 %

            In distribution and other services : £187 million to £250 million : plus 34 per cent.

            If that’s “squandering,” let’s have more of it.

        • Peter Barnard

          And, Bill L, the manufacturing index grew from 38.1 in 1948 to 76.8 in 1968 (2005 = 100) : a compound growth rate of 3.6% per annum.

  • ThePurpleBooker

    How about we have a system of tax reliefs and interest-free loan and grants, for the manufacturing industry in Britain to support it as well as the creation of British Investment Bank using the RBS.

  • JoeDM

    The word “cost” does not appear once in this article !!!

    Whatever we make it must be made efficiently and at a cost that others will buy and that requires a flexible labour market.

    • Dave Postles

      Costs.  Good idea: let’s start with management costs in the corporate sector and the cost of failure therein.

    • DaveCitizen

       Costs are important but let’s do something to bring them down that doesn’t involve increasing inequality – like bring down the part of labour cost that goes to landlords and banks as rent or mortgage. That means building masses of homes, taxing multiple home ownership, particularly empty ‘investment’ land and property and luxury second (or more) homes.

      If homes are taxed to make them for living in rather than making money out of we’d have a chance of making money out of making things!

      • treborc1

         I know this is a swear word these days but we really do need social homes, you know Council houses.

        • Redshift

          A lot of Labour councils are pushing this with intent not seen for decades now. 

          • treborc1

             It would be nice,  in Wales the Assembly are asking for powers to borrow, they are demanding fairness in the  money being given to Wales we lost 500 million from Browns lot

    • Redshift

      At the moment we are paying the cost of a lack of jobs from not producing domestically. We cannot rely on cheap imports because we have a terrible trade deficit far more worrying than our budget deficit in many ways.

      • treborc1

         Then again in making things we have to compete no good producing things which cost more and people cannot afford.

  • Bill Lockhart

    I’m not sure any political party will ever get past the “education” aspect of this problem, since that would involve the acknowledgement that education  actually has to be quite demanding and discriminatory if it is to be worthwhile. Far easier politically to continue the silly pretence that children and teachers all become more skilled, intelligent and hard-working each passing year, whilst employers teach 20-year-olds how to read and count. The author effectively concedes as much in his enthusiasm for immigration. The British children who fail to benefit from school education will be no better off in a society even more dependent upon immigrants: they will still be unemployable.

    • treborc1

       That’s because governments want to tell children about babies and sex and cooking at 3 and 4 years old.

      My grandson has two lessons in English written, and five lessons on speaking Welsh, two lessons on maths and then three on French, we did stop the Urdu lessons.

      • Redshift

        I wish I knew more foreign languages. I did three years of German which is therefore at a poor level. Useless and frankly embarrassing.

    • Redshift

      This is just Daily Mail bollocks. The vast majority of students at school are far better educated than they were ‘in the good old days’. Someone doing GCSE Chemistry now is studying things that 15 years ago would be on an A-level course. 

      There are problems with our education system. A lack of vocational options for kids who excel at very few academic subjects which decreases interest, effort, aspiration and increases truancy – ultimately leaving them with little or no qualifications (which is generally mad because economically we lack many of those vocational skills). This is a problem that has been ignored by both parties for a long time. 
      Another problem like every time we get a Tory government is under-funding in schools. When I started high school it was half filled with leaking pre-fab blocks, when I left, thanks to Labour, we had far, far better facilities, buildings, etc – it was a proper environment for learning. Now we are going backwards again. 

      We can’t tackle these problems whilst bitter old men dominate the criticism of education screaming bring back the cane. Contrary to what you are saying we need less elitism. We need to value every student and ensure that everyone is good at something. Not everyone is going to go onto university and certainly not everyone is going to be in a high-paid job – but what we can ensure is that we have a workforce that has all the right skills that we need and to do that we need everybody to come out of school good at something.

      • AlanGiles

        ” A lack of vocational options for kids who excel at very few academic subjects which decreases interest, effort, aspiration and increases truancy – ultimately leaving them with little or no qualifications”

        I think this is very true. It is compounded by politicians who seem to think that university is the panacea to all ills, and the – perhaps unintentional – prejudice some of these people have that if you are not an Oxbridge undergraduate you have somehow failed.

        “We can’t tackle these problems whilst bitter old men dominate the criticism of education screaming bring back the cane.”

        When I was a schoolboy, you could get the cane for virtually nothing. Now if you want it you have to go to certain phone boxes,  or adverts in newsagents windows,  and pay for it. Perhaps they are just nostalgic!.

        —–

        All my links today were of younger British trumpet players, except for Colin Steele, who is Scottish.

  • Quiet_Sceptic

    On the skills issue, is it a question of increasing the number of graduates or those in post-16 education or is it about the types of courses young people are taking and whether they actually match the skills demanded in the work place?

    We’ve had a huge expansion of university and post-16 education and yet some disciplines and subjects, typically those claimed to be most in demand, have even seen declining uptake. Is the solution more education or different education?

  • Jeremy_Preece

    There is much that I would agree with here. I have always felt that the so called invisible earnings – banking insurance etc. was the icing on the cake. But then in the 1970’s when I was at secondary school the phrase that I heard banded about was “Britain’s manufacturing base”. The two go together, the idea that there is a lot of manufacturing, there is some agriculture, some mining and some steal works (heavy industry) and light industry. That is the cake, and the financial services are just the icing. 

    Between 1995 and 2001 I worked for a company in the IT sector who had a philosophy of breaking into as many different markets as possible, pubilc sector, banking and finance, retail and petrol and so on. The idea was that at any time, some sectors would do better than others, and while each had its core staff, the majority of employees could move between sectors, depending on which sectors were doing well at that time. It has always seemed to me that the idea of Britain doing nothing except finance and sales was always going to make us vulnerable to economic downturn. Like the company that I used to work for I think that a country should spread its risks. The fact that we didn’t has contributed to making us so vulnerable post 2008. I think Pat, that your article captures some of that.

    So yes, we need to build, or “make things”. Given that government has a key role to play I also think that there is much that government can do in terms of infrustructure. Builing modern railways, tramways and rapid transport systems, modernising exisitng systems and providing a first rate public transport network would be a great place to start.

    The intial building provides a huge economic stimulas. not only for construction jobs, but all of the support business that would support this work. The net result is that we have better infrustructure and this helps us win new companies and investment. 

    It is not only transport, but energy. We could and should go back to the Severn Barrage scheme for building massive hyro electricity generators. The idea of nuclear power (particulary after Japan) is not environmentally sound, and is dagerous. I was staggered to hear that this government scrapped the idea in favour of nuclear power stations that private companies could make huge profit out of, and the cost would be carried by the ordinary householder by means of higher energy bills. But then again, why should I be surprised that the Tory idea is based only on lining the pockets of the big shareholders.

    Of course the role of public ownership is probably more acceptable today that it was under Tony Blair. This is because in the post Thatcher era, to many the idea of public nationalised indusrty seemed old and out of date. Nowadays anyone who has relied on the railways, knows only too well what privatised chaos is like, and what is means to be a poor customer in an privatised rail network, whereby your local train company has you over a barrel, and you bpay more for a shoddy service, so that the shareholders can grow fat. The key would be to ensure that the public owned organisation is slick and focused and not like the way that Brisitsh Rail was back in the 1970’s. 

    Building, replacing and updating schools and hospitals is also an area to be considered.

    At the end of the day, Labour could then be seen as really buisiness friendly. The Tories always regard the need for growth, and being business friendly as an excuse to pay workers less, and the few shareholders more. The inefficiant bully-boss, and all that is nasty that goes with this, is all that the coalition government are offering.

    Instead of using the idea of growth as an excuse to trample on the rights of ordinary people who work, Labour could offer the business comminity the opportunity to suceed in a country with good infrustucture and where the employment is higher so that there are more people with more resources who want to go to their local businesses and buy their goods and services. If that could be pulled off then we would have real growth.

    So many of the houses where we did leaflet drops down here in the South (this and last year) are houses with the white cans outside. Theses are people who either don’t vote, or vote Tory because  they are small business men. From what I could see, they are that way not by conviction, but because they can’t see what is in it for them to vote Labour. These are very hard working people with small businesses which are vulnerable to the downturn. They are not venture capitalists, or shreholder and boardroom carpet bagers. I think that the idea of growth by providing customers in an area supported by good infrustructure is actually a winner in these areas of the UK where we need to do well if we are to win the next election. I think that there are votes here that could be won.

    One thing that is clear, is that the austerity policy is going nowhere, except into recession/ depression. Given that the current government policy also costs to wreck jobs, while there are less tax payers to pump up the money for debt repayment we should stop just asking if we can afford these real growth measures, we should ask if we can afford not to.

  • AlanGiles

    Excellent sentiments – who could disagree with this article?. it does, however, beg the question, why didn’t the government, of which the author was part, not doing anything to help the manufacturing sector between 1997-2010 – perhaps Mr McF was too busy shopping in Heals and Habitat to notice?

    * Gerard Prescencer (1972 –     )

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