Our ‘Build Back Better’ club acquired an application from a new aspiring member this week: welcome, Prime Minister. I hope that you will take some time to familiarise yourself with the rules of the club but, as your Dudley speech seems to suggest, you may only have a passing understanding of what we’re trying to achieve. After much fanfare and acres of newsprint devoted to trailing the UK’s much-vaunted 2020 version of Franklin D. Roosevelt’s New Deal, many will be thinking – “was that it?”. An extra £75 per person to fix some bridges, which we knew about already, amid a soup of words and, of course, no actual new money. No detail and no commitment to making the buses, heat pumps, glass, turbines or the electric vehicles we desperately need here in the UK. You can understand why some in the club may not be ready to bring the Prime Minister into the fold just yet.
I heard a better understanding of what this country needs to build a new economy from a Conservative supporter the other day. The Tyneside businessman was on the radio asking why his local train station, which he felt was well cared for and working decently, was a candidate for infrastructure investment. He would much prefer to see the government invest in and expand our manufacturing base. He couldn’t fathom the government’s aversion to manufacturing investment – neither can I, and nor can the manufacturing industry bodies I speak to every day.
The most telling line in the Prime Minister’s speech was when he said that we “know in our hearts that furloughing cannot go on forever”. We understand that it’s not possible for the taxpayer to stand behind 11 million private sector jobs indefinitely, and nobody is asking for that. But what we do need is an extension of furlough to save thousands of jobs right now. What the trade unions have been looking for is a strategic approach that would see sector support packages take over, bringing people back to work in a phased way – such as by short-time working, or for retraining as furlough tapers off. So far, all we have got with certainty is that the job retention scheme will taper off – the first part of the equation is evidently missing.
This lopsided management of economic recovery does not find favour among our competitors. In France, Germany and Spain, central governments are extending furlough schemes – some by two years. They see this move as central to buying the space to repair the pandemic damage while averting crippling unemployment. The derisive term ‘zombie jobs’ has been bandied about, but in Germany and France wage support comes alongside demands on core industries to accelerate retraining and diversification, as well as to commit to green enterprises and in-country investment and jobs. Nothing lopsided about this approach to building back better.
Germany’s Kurzarbeitergeld (STW) programme is of a piece with their enviable approach to manufacturing. It is never the mistreated Cinderella of their economy. In Germany, manufacturing is the belle of the ball, with employers, unions and the top levels of government proud to get round the table to work on how they stay world-leaders, with this enthusiasm running through every aspect of economic life from the education system to the regional investment bank structure, which is so proud to stand behind German business. State wage support in Germany and France also comes with the demand that there are no job losses during the two years of furlough. Germany’s scheme cannot be used during notice periods, as British Airways and others are doing, so disgracefully. If they want to dismiss workers, they have to put them on notice, paid and back at work.
There was another line from the Prime Minister’s speech that alarmed me – the one where he reassured the City that it would not lose out with his approach to “levelling up”. The City will never be a fan of the commitment that must come with building and investing, preferring the easy lure of the service sector and quick returns for the boardroom. Such short-termism has plagued British industrial development for the past half a century. It belongs in the pre-pandemic era; it has no place in a country where the majority of people want economic reform and say that there should be no back to business as usual.
Across Germany, France and Spain, working people – like working people in this country – are fearful for what will soon be upon us as our economies emerge from their deep sleeps and face contact with reality. The difference in the experience of our manufacturing friends and comrades over on the continent, is that they will have a measure of wage security – they will have work to do, necessary work rebuilding prosperity. The question I want to ask the Prime Minister is why is it that a worker in Cologne knows that they will be able to feed their family and keep a roof over their heads through the tough times ahead, while a worker doing the same job in Cowley or Coventry has no such security?
Workers in the ‘Red/Blue Wall’ seats will be asking the same question. The promise of some far-off infrastructure project – probably at the other end of the country – has little appeal for skilled workers who want to know why their jobs are moving overseas. With more skilled and decent UK jobs disappearing this week at Airbus while the government sits on the sidelines, doing nothing, it strikes me that there is no ‘New Deal’ – just the same old Conservative deal. The more I watch this government at close quarters, professing to listen but taking no action, the more I fear that this is just the industrial sabotage of the 1980s but with better PR.
The slender hope that I take from the Prime Minister’s speech, though, is that he might be just the warm-up act. Perhaps the real show is next week when the Chancellor sets out his plans for economic revival with targeted support to recover our strategically vital industries and with the determined, joined-up programme to deliver on our climate change commitments. Until then, the Build Back Better club will keep the Prime Minister’s membership application well and truly under review.