As each week passes, more examples of the government’s failure to develop a coherent industrial strategy become evident.
The challenges for UK steel and engineering are not new. Red flags have been waving for years. You might consider that the government would have thought through the implications of some of its key spending decisions for these core industries. But no.
Let’s take defence as an example. Protecting its citizens has to be a high priority for any government. Maintaining a strong defence industrial base within the UK is also a matter of sovereignty.
But, instead of taking a strategic approach to defence procurement, the Coalition and Conservative governments have moved to “off the shelf” procurement. This means that more of the Ministry of Defence’s (MoD) business has been sent overseas, leading to the loss of jobs and crucial expertise from within the UK.
In 2012, the government adopted a new procurement policy which requires decisions on equipment spending to be geared towards maximising “value-for-money”. However, unlike other countries, the government insisted that the MoD, in its own words, “does not consider wider employment, industrial and economic factors in its value-for-money assessments”. Can you think of another European country which does this? Of course not.
As a result, the government
- scrapped the Harrier fleet and cancelled the replacement of the Nimrod Maritime Patrol Aircraft, which resulted in the loss of 1,300 British jobs. The government later decided to spend £2 billion on new P-8 Poseidon aircraft, to replace the Nimrod fleet, but al purchased from, and manufactured by, Boeing in the USA;
- cut back on domestic shipbuilding – causing the loss of almost 2,000 jobs – while investing almost £500 million pounds in new ships now being manufactured in South Korea; and
- allowed 60% of the steel required for the Royal Navy’s new Offshore Patrol Vessels, currently under construction, to be sourced from Sweden;
There are many other examples.
When a government is so ideologically committed to the market – however badly flawed and inadequate – we should not be surprised at the poor outcomes for our industrial production base and for skilled jobs.