“This Government has lost its way.”—Lord Finkelstein
With the ritual pomp and circumstance of Life Guards, Beefeaters, Rolls Royces, Black Rod and everyone who’s anyone among Westminster politicos, a new session of parliament was opened on May 10th. For the first time, Prince Charles did the honours and more media attention fussed over the Queen’s absence than the substance of the 38 bills to be shepherded through in this session.
The following debate on the matter centred on there being “little to address the current cost of living crisis” (Keir Starmer), but this seems unfair. This was always a programme of government which would have little effect before the bills were drafted, discussed, agreed and promulgated, a process that typically takes two years.
The stated aim of these bills was “to turbocharge the economy”, with the subtext that Britain would have to grow its way out of its present fiscal problems of soaring energy costs, looming double-digit inflation, rising interest rates and a national debt creeping toward £3 trillion (£46,150 per head of population). Some bills may contribute to growth, including HS2 Crewe-Manchester and a House Building Programme for England. One to “make a bonfire of EU red tape” is to realise £1 billion in savings. But many others, such as those to curb illegal immigration and increase police powers to control demonstrations, show costs, rather than economic boosts. Only a vague reference to rectifying flaws in the Northern Ireland Protocol that have derailed the Northern Ireland Assembly offers a hint that it will be simply scrapped, in defiance of the EU. Liz Truss is clearing the political ground by finally rejecting EU proposals she has been sitting on since October.
Yet, there is no clear strategy to disentangle customs hold-ups that exacerbate a 15% drop in exports—serious enough to soak up any economic growth to the point of threatening recession and stagflation.
In short, there were few clear signs how the much-touted “Brexit Bonus” “Levelling-Up” and “high-paying, high-skilled jobs” all touted as delivering the desired growth remain vague and unspecified. This all smacks of few ideas among growing desperation.
No-one disputes the ability of high-value jobs in turbocharging the economy. But there are few examples of governments being the main driver. Conservatives tour privatisation as the magic wand. But they sold off UK control of North Sea oil and publicly owned power companies. This resulted in the our present impotence to control this energy price shock. In contrast, the French did not—in fact state-owned EDF is one of Britain’s |big six” energy companies that is using UK profits to keep French prices down. They sold off BA and UK airports, which are now the most Heath-Robinson and most underdeveloped in Europe. Rail privatisation has given us the most fragmented and most expensive rail system too.
What Conservatives seem to have forgotten was that, once the brutality and slavery that characterised the early British Empire had bootstrapped its riches, the Victorians developed more humanitarian principles while leading the world in technologies developed and exploited by entrepreneurs. Government had very little to do with it, beyond providing civic stability (through democracy) and protected trade (through the Royal Navy).
Hankering wistfully after that heyday, which the UK government and especially the Little Englander backwoodsmen from the shires is unlikely to recreate that in a world of economic giants like China and the USA. What they fail to recognise is Britain needs a USP or two, which will not be established by random scattering of money.
Such an example is the £2.6 billion Regional Growth Fund (RGF) for England supports eligible projects and raising private sector investment to create economic growth and lasting employment. When the BBC put FOI requests to 100 eligible local authorities, they found that 35 had not applied and a further 28 had their proposals rejected. In each case, an expensive and time-consuming proposal had to be submitted and there is no sense that the 37 in process offer any coherence likely to develop USPs.
Looking at other economies, Germany specialises in the high-precision engineering required for quality cars, white goods, machine tools, etc. Denmark has the lion’s share of wind turbine production. The Dutch have cornered the market in global marine towing. What Britain needs is to expand existing advantages, such as in jet engines, offshore engineering, aerospace and biotechnology. To this, it must add new fields, like tidal energy, artificial intelligence (AI) or fintech.
But only when Hartlepool has become the global hub of tidal energy, Manchester of AI and Edinburgh of fintech will any “levelling up” become reality, rather than the bureaucratic squandering of billions, such as the 1960’s ill-fated Linwood car plant and Ravenswood steel mill to counter Glasgow’s industrial decline.
And Scotland shows that it is not just Westminster that can displays scant understanding of the problem, let alone how a self-sustaining dynamic breakthrough could be achieved. At the same time as the Queen’s Speech, Scottish Enterprise was welcoming business attendees to the 2022 World Forum for FDI (Foreign Direct Investment) at Edinburgh’s ECC. This international event highlighting Scotland as a world-leading destination for investment and business location. Its purpose is given as:
“...to showcase Scotland’s on-going ability to attract cutting edge/innovative/world leading international projects, with the country continuing to be the most attractive location in the UK outside of London for Foreign Direct Investment.”
This is positive-sounding, but just as fuzzy as that embodied in the Queen’s Speech. SDI is unveiling a series of new ‘extended reality’ investment propositions to promote strategic investment sites in Scotland. The Forum features panel discussions on “sectors critical to Scotland’s economy, such as a Just Transition, Health Tech and Software/Digital Industries”.
All of which also sounds good, but is in danger of falling between two stools. The boom of FDI in the 1980s that produced “Silicon Glen” was soon recognised as largely a third-world operation—an opportunity to produce goods cheaply within the EU, but bringing few of the “high-paid, high-value” jobs discussed above. Despite Scotland’s claim to have a well educated work force and quality universities, the chances of FDI bringing in the R&D labs, the skunk works, the engineering infrastructure like wind tunnels or cutting-edge fab lines that are the seeds from which USP businesses grow are actually small. Certainly, Scottish Enterprise’s £600 million budget has failed to secure any to date. White elephants like the Chunghua Picture Tube (remember them) on the M8, or Hyundai plant in Dunfermline East sully their reputation for anticipating technical opportunity is heading.
North or South of the border, those charged with securing our future prosperity are not demonstrating they are worthy heirs to Brunel, Telford, Baird or Gresley. Because that’s what we need to survive, le alone prosper, in the 21st century.
Bureaucrats need not apply.