Decades of putting City spivs before manufacturing jobs has cost us dear

THE threatened closure of the Appledore shipyard, which has lost the contract to build two navy frigates, looms large in the minds of the yard’s workers and those in its supply chain.

Unite’s Steve Turner put it in context: “The loss of the contract to Italian yard Fincantieri has exposed the vulnerability of the Appledore site, while government delays to the Type 31e frigates and an obsession with offshoring the construction of three fleet support ships for our naval carrier fleet is threatening jobs across the UK.”

Building a skills base for a large modern manufacturing economy creates a virtuous circle in which the collective social investment in education and training pays off in raised technical, scientific and cultural levels, raised expectations in children and young people that a worthwhile career is available and diversified and productive local economies.

This is true for every manufacturing sector. But the Appledore situation illustrates a peculiar feature of Britain’s manufacturing sector — its one-sided dependence on military contracts of all kinds set against a general decline in making useful things.

For near enough 100 years from 1870 (the year of the first Education Act which made basic education a national priority) to the ’60s, manufacturing was central to the development of the economy.

Since then the decline of Britain’s manufacturing sector — relative both to both other sectors of the economy and to other countries — has continued.

For the last part of the 20th century “free market” policies and a Thatcherite reduction in direct state intervention led to a stagnation in output and a continued decline in jobs with employment in manufacturing falling by an annual rate of 2.6 per cent.

Monetarist policies damaged manufacturing with high interest rates and an overvalued currency making manufacturing exports uncompetitive and the products of British industry uncompetitive against cheaper imports.

You might think that a sustained period of New Labour government would have resulted in a marked revival of the productive economy.
The opposite occurred. To a mounting chorus of disappointed trade union voices, Tony Blair and Gordon Brown favoured speculation and the City spivs over productive work.

This reached its grotesque apogee when, as chancellor, Brown congratulated the bejewelled citizens of the Square Mile on their “remarkable achievements” leading to “an era that history will record as the beginning of a new golden age.”

This was followed by the deepest capitalist crisis for decades.

A strategy to end Britain’s relative decline in manufacturing must tackle deep structural problems.

The chronic failure, by British capitalists, to invest sufficiently in manufacturing might be ascribed to capital’s inherent lack of patriotism.

The export of capital and the search for higher profit is in the DNA of imperialism and while capital’s pursuit of profit is invariably accompanied by a barrage of patriotic sentiment, this has not resulted in long-term investment in British industry.

And just this week research by the Sheffield Political Economy Research Institute found that our country has suffered a loss of a “staggering” £4.5 trillion over the last 20 years because of an oversized financial sector.

They argue that in the 20 years from 1995 GDP was lowered by 14 per cent compared to what might have been with a slimmed down finance sector.

To put this into both an abstract and human dimension, Britain has lost out on the equivalent of two-and-a-half years of GDP, or £67,500 per person.

But it was not all gloom. Rejoice in the knowledge that while we endured austerity, financial service firms harvested £400 billion in excess profits.

Time for a Labour government that puts the interests of the many before the few.