As David Cameron and George Osborne flounder, play the blame game, lecture others, and stick to a Plan A that isn’t working, the economic argument is shifting Labour’s way.
Of course there are still people prepared to buy the Tory line that the global crisis and its impact were caused by Labour, but they are fewer in number, and less convinced having seen how spectacularly unsuccessful has been the coalition’s attempts to see the private sector fill the gap created by their slashing of the public sector.
So as borrowing rises, as the Tory ambition to cut the deficit within a Parliament fades, people are starting to listen to Labour again, and the polling on economic credibility is shifting fast. The Miliband-Balls mantra that the coalition was cutting too fast and too deep is bearing political fruit. Ed Balls is now able to point around the world to governments which took an approach closer to Labour’s, and which are not in the state our economy is in. And Francois Hollande is already shifting the debate in Europe.
Today we see two of the former ministers, James Purnell and Pat McFadden, adding to the debate with contributions more intelligent and creative than those coming from the Tory side, where Cameron and Osborne continue to lash out at others rather than have a proper plan for jobs and growth of their own.
James Purnell, now out of Parliament but still making a contribution, says in The Times we should be focusing on those areas of the economy where we are recognised as being world-class, and develop them. So universities, the creative and knowledge industries, a culture that is open to ideas and migration, contract law you can trust.
Pat, a former business minister, and still an MP, has published a detailed and thoughtful pamphlet for the Policy Network think tank setting out the need for, and the possible elements of, an active industrial policy. Here it is
And here is the argument behind it.
“Making Things” sets out plan for UK’s economic future
In the absence of a credible growth strategy for the British economy, former Labour business minister calls for a “making things” revival
The Conservative-Liberal Democrat coalition blames Britain’s recent descent into double-dip recession, not on failing government policy, but on instability in the Eurozone. Meanwhile, Growth has replaced austerity as the leading buzzword in British and European politics – but how will it come about?
With an acutely unbalanced economy and a popular belief in the death of British manufacturing, everywhere you turn it is hard to escape the image of “declinism”. Worse, the government seems only to have one solution to get the deficit down and Britain’s economy growing again: fiscal austerity.
McFadden champions the UK’s great strengths in the automotive, aerospace and pharmaceutical industries but also focussed on Britain’s strength in creative “weightless industries”.
His pamphlet, published by Policy Network, calls for Britain to reject the “declinism” which has too often characterised the discussion of British industry. Instead, Mr McFadden calls for a new project of national renewal grounded in “making things”. “Making things”, he argues, should also include the creative industries where Britain excels – areas like music and computer games. These industries contribute hugely to our image around the world and to our economy at home. “In this digital age, making things is no longer restricted to only what we can see and touch. Music, computer games, television formats – this is making things too”.
For McFadden, making more is not just about good economics. It also has positive social and political effects too. “Too often we think the answer to political disaffection is about how we talk about politics. Political disaffection is also related to economic disaffection. Too many people feel left out of our economy, and thus, our national story.”
Having spent significant time embedded in one of Britain’s resurgent manufacturing companies – Jaguar Land Rover – and interviewed a number of SMEs and leading music industry figures for the pamphlet, Mr McFadden’s research has led him to devise five key things government should do to improve industry and help set the economy back on the road to recovery:
1. Equip people better to do the jobs making things requires.
2. Show that Britain is open for business by stopping sending out signals that the UK does not welcome foreign students or talented workers from abroad.
3. A Whitehall culture change that takes UK manufacturing and national capacity serious seriously. McFadden argues it is not enough to call for an industry policy – there has to be change in Government to ensure that one can be delivered.
4. Sorting out chronic finance problem for business via a new National Investment Bank and more alternatives for SME bank lending.
5. Building on creative industry strengths and restoring the belief that Britain makes things.
Describing Mr McFadden’s proposals Former Business Secretary Peter Mandelson said: “There have been many calls in recent months for a plan for growth, but no solid proposals from government. This pamphlet puts flesh on the bones of what a plan for growth might look like. It is absolutely right to reject the “declinist” image about Britain’s capacity to make things. Instead government must help boost both physical manufacturing and the creative industries to get Britain out of this double-dip recession.”
Andy Heath, Chairman of UK music said, “This pamphlet finally gives the UK creative industries the recognition they deserve. Britain leads the world in cultural exports but their economic impact has long been underappreciated. In the digital age, these weightless industries already make, and can continue to make a very big contribution to Britain’s image and economic well being.”
For further information contact Gemma Ricketts in Pat McFadden’s office on 0207 219 4036 or 07919 530894 or Michael McTernan at Policy Network on 0207 340 2215