New money for industry – let’s spend it wisely!
Today’s Budget announced a £750m Strategic Investment Fund, to support advanced industrial projects. This follows Monday’s launch of ‘New Industry, New Jobs: Building Britain’s Future’, by the Prime Minister, Gordon Brown, and the Business Secretary, Peter Mandelson.
The TUC has campaigned for years for an intelligent industrial strategy, centered on the kind of strategic industries where the UK is or could become competitive in world markets. For most of those years, both the Government and employers were lukewarm, equating our approach with a failed policy of ‘picking winners’.
Yet Lord Mandelson’s return to Government brought with it a fresh look at this idea, through the concept of Active Industrialism. ‘New Industry, New Jobs’ showed the fruits of this concept. With an emphasis on the value of strategic sectors, including engine and wing manufacture in the aerospace industry, industrial biotechnology and plastics electronics, along with the whole digital and low carbon agendas, ‘New Industry, New Jobs’ was the most important industrial policy paper since Labour’s election in 1997.
One obvious question, however, was: this is all very well, but how will it be paid for? Today’s commitment of £750m provides the answer. £750m is not a King’s Ransom. But it is not small change either.
Of that £750m, £250m will be allocated to low carbon investments, a further £50m to the Technology Strategy Board and £10m for UK Trade and Investment.
The story of declining manufacturing jobs in the UK has often been told. Put simply, our fall in manufacturing jobs has been steeper than those in comparative economies. Of course we would expect low cost jobs to migrate to Eastern Europe or developing Asia, but we have not fared well compared with France, Germany (especially Germany), Spain or Italy either.
The Government constantly emphasises value for money – and quite right too. Government money is, after all, taxpayers money. So the TUC sets this test: every pound of the £750m must be spent in sectors, industries or companies with the potential to create or safeguard high skill, high value jobs. For too long we have fostered the naive belief that if we get the economic fundamentals right, the jobs will automatically follow. The history of the last 30 years teaches us that the world doesn’t work that way.
Whether jobs are created in companies exporting abroad, or are in inward investors to the UK, does not matter. What matters is that the UK’s rightful place as a leading industrial nation, focusing on high skill, high value sectors, where we can compete with any country in the world, must be safeguarded.