The patchwork economyby Frances O’Grady / December 2, 2017 / Leave a comment
For decades, Britain has been crying out for an industrial strategy. Our infrastructure is poor, our workforce lacks the skills we need, inequality has soared, and wages have stagnated for a decade.
Globalisation has brought prosperity for some, but many others have seen wellpaid, skilled jobs disappear. They have felt abandoned by successive governments, as they watched infrastructure investment flow into London and a few other urban centres. Regional inequalities are not inevitable, but the result of an economy that has overcentralised power, and deprived communities of investment. Many towns simply do not have the power and cash to create good quality jobs close to home.
Now that an industrial strategy is finally on the table, its aim must be to encourage the creation of jobs where they are needed most. Stronger growth and productivity for the UK as a whole is not good enough if it means that some parts of the nation are simply left behind.
This year the TUC took a research project to three very different places: Liverpool City Region, Tees Valley and Norfolk and Suffolk. We set out to examine what could be achieved with industrial strategies that are made from the bottom up.
“Brexit—especially a hard Brexit—could harm regional economies by damaging exporters, supply chains and access to skilled workers”
The three studies looked at what was distinctive about each area. We listened closely to what workers, employers, and local government politicians and officials had to say. And with their help we identified the unique opportunities in each place for creating and sustaining jobs.
Low wages, insecure work, low productivity and pockets of stubborn deprivation are common to all. They face further cuts to local government and public services. And the impact of Brexit especially a hard Brexit—could harm their economies too, by damaging local exporters, disrupting supply chains, and restricting access to skilled workers.
But they each have unique features too. Norfolk and Suffolk have a strong maritime history and coastal economy, and a high concentration of food manufacturers. Tees Valley has a history of heavy industry and a major port (Teesport) with potential for expansion. And Liverpool City Region has a growing visitor economy, a productive manufacturing centre, and Liverpool University.
Those distinctive strengths offer real opportunities. For example, heavy industry in Tees Valley gives it one of the largest carbon footprints per capita in the UK. But it also has ideal coastal geology for a pioneering carbon capture and storage plant. The plant itself would create lots of high-skilled, well-paid jobs. And it would local energy-intensive industries by making them a sustainable part of the low carbon economy Britain needs.
Norfolk and Suffolk have great potential for offshore wind plants, and to play a part in the highly-lucrative business of decommissioning old gas and oil infrastructure from the North Sea. But to take advantage of these opportunities, the region must invest in a specialist deep water dock, train more engineers, and it must improve regional transport connections.
As with Tees Valley, Liverpool City Region has recently secured a devolution deal. It has a new combined authority and metro mayor, with greater control of the funds and decisions that can lead to job creation. The powers and funds could be used to target the visitor economy, which the study identified as ripe for expansion. And the world-renowned University of Liverpool could deepen its relationship with the local community through high employment standards, and by buying from local businesses.
These are just a few of the examples from the studies. We found plenty of evidence to convince us that this kind of place-based approach could unlock tremendous potential throughout Britain—and create good jobs.
That doesn’t mean industrial strategy can simply be left to local government. On the contrary, nothing can happen without leadership, support and funding from central government.
The UK lags well behind the OECD average for public investment in infrastructure. Only central government can put that right. And central government needs to close the gap with our EU competitors on funding for training.
“The vision is of an economy that provides well-paid, fulfilling jobs in environmentally sustainable industries”
It is also central government’s job to create a framework that allows local government and mayors greater decisionmaking powers and control over funding. Without it, a place-based strategy is impossible.
Industrial strategy should be like a patchwork quilt. It must work as a single piece—with overall vision, and drawn together by strong strands that run throughout. But when you look closer, it is full of distinctive local designs.
The overall vision is of an economy that provides well-paid, fulfilling jobs in industries that are environmentally sustainable. It must look decades ahead, and put long-term national prosperity ahead of short-term private profits. And it must reach every part of the UK.
There should be a role for workers’ voices. Government, business and unions must work together—nationally and locally—to formulate shared plans that work for people and businesses. Working people must be given a bigger say in the decisions that affect their lives. This means transferring power away from Whitehall. It’s good for business too—all the evidence is that, where workers’ voices are heard, workplace productivity goes up.
Another strand is long-term investment. It’s needed in infrastructure like transport links, clean energy and broadband. It’s needed in science and innovation. It’s needed to replace EU funds. And it’s needed to assist workers, to improve pay and the quality of work. This must include smart procurement policies from local government to reward decent employers over those whose business model relies on low paid, and insecure jobs. And it should include new regional industrial bodies, to bring together sectoral groups of employers and trade unions to strategise, improve pay an productivity, and to spread take-up of the real Living Wage and collective bargaining.
Getting there from here will require a fundamental change to the way the economy works. It demands a bold industrial strategy. Let’s give Britain the ambition to create great jobs for everyone, everywhere.
Brexit Britain: the future of industry is a publication which examines the future of UK manufacturing through the prism of the recently released Industrial Strategy White Paper. The report features contributions from the likes of Greg Clark MP, Miriam Gonzalez, Richard Graham MP and Frances O’Grady.
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