Heseltine Review: a trade union response
This morning saw the publication of ‘No Stone Unturned’, the long-awaited report of the Heseltine Review. The TUC has been happy to engage with Lord Heseltine and his team throughout the review process. We met him early, as did representatives of various business organisations and many others. We attended evidence gathering sessions and contributed our ideas. We gave our response to emerging themes. In the report itself, Lord Heseltine graciously recognises our role in kick-starting his initiative, stating that “[w]hen the CBI, the TUC and The Times newspaper are united in calling for an industrial strategy, the issue deserves serious consideration”.
So what do I think of it? I think ‘No Stone Unturned’ is the most important economic policy statement to have emerged since the Coalition took office in the summer of 2010.
It ranks with Labour’s ‘New Industry, New Jobs’ in terms of the seriousness of its intent. But whereas Peter Mandelson’s initiative came too late in the life of the Labour Government to have a serious impact, Heseltine’s work does not have this problem. Indeed, if its themes are taken up by the Government, it could start to turn the corner, away from the economic and industrial decline that has long seemed inevitable in the UK.
The report runs to 228 pages and includes 89 recommendations, so you will excuse me if this post just skims the surface. I can simply highly what, for me, are some of the most important arguments put forward in the report.
First, Lord Heseltine calls for the Prime Minister to chair a National Growth Council with a cross government focus on driving growth and wealth creation. A National Growth Strategy should set out the Government’s vision and should include concrete commitments against which it can be held to account. A designated minister should drive implementation of the growth strategy across all departments.
I’ve long believed in a growth target, which could be a GDP figure, but is more likely to be a set of designated outcomes. A specific minister to drive implementation sounds fine to me, so long as the buck stops with the Prime Minister. If the PM is to chair a National Growth Council, he or she should be driving proceedings and outcomes. If the strategy comes off track, it should be the PM who is answerable to Parliament – as well as to John Humphrys in the morning and Jeremy Paxman in the evening. The UK’s economic renaissance should be at the top of the PM’s ‘to do’ list.
Second, Lord Heseltine calls for a sectoral economic strategy and for an Industry Council for each formal partnership between government and a sector. In fact, the Business Secretary, Vince Cable, has been moving in this direction recently. The TUC called for a focus on strategic sectors back in 2005, when “industrial” and “policy”, when joined together, were still dirty words, so needless to say, we welcome this. It is important, however, that trade unionists with a wealth of experience in some of our top industries are invited to serve on those Industry Councils where they can add value.
Third, Lord Heseltine calls on much of industry to raise its game. He is right to say that the UK is home to some of the best companies in the world and trade unions are proud to represent workers in many of those companies. However, Lord Heseltine speaks an uncomfortable truth when he says that “[w]e cannot afford, though, to be dazzled by their success and ignore the performance of the average. To put it bluntly, the performance of the best needs to be extended more widely.” Among recommendations, ‘No Stone Unturned’ puts forward ideas for improving leadership and management capabilities.
Fourth, Lord Heseltine raises the need to use procurement policy to support building the UK’s long-term technological advantage and its industrial base. Again, the TUC argued this case for many years, to governments of both the Labour and Coalition varieties, and we recognise progress on this issue from the Cabinet Office in recent months. It is amazing that such common sense was blocked so resolutely for so long, such has been the influence of neo-liberal laissez faire economics in every corner of government over recent years, but finally we are starting to think differently about procurement policy.
There are more common sense suggestions in the report, including the need for clarity over future airport capacity in the South East and the importance of science and research funding at a level which keeps pace with our international competitors.
As we might expect, ‘No Stone Unturned’ focuses on Lord Heseltine’s long-held belief in localism and the role of great cities. In doing so, it proposes new powers and new responsibilities for Local Enterprise Partnerships (LEPs). I’ve no objection to that in principle, but LEPs are a long way from being fit for this purpose at present. To be fair, the report recognises this, stating that LEPs should expand their boards to ensure they have the necessary skills and expertise to deliver their expanded functions. The TUC was a strong supporter of Regional Development Agencies, whose abolition owed much to ideology, but if they are not to return, LEPs must be made to work. For that reason, it is important that ‘No Stone Unturned’ recognises, in its own words, “What is missing is the experience of those from the shop floor of industry.”
Which brings us to the role of trade unions more generally. There is a lot of talk at present about a new model of capitalism. Much of this debate has been led by Ed Miliband and Labour’s Shadow Business Secretary, Chuka Umunna, has been thinking hard about this. Yet any model of better capitalism must include a workforce voice. I agree with ‘No Stone Unturned’, that we need more companies to raise their game, but the simple truth is that a better capitalism requires a balance of stakeholders. I’m all for employer philanthropy, but if we could always rely on employers to do the right thing, we would never have needed a National Minimum Wage. As the TUC report ‘German Lessons’ showed, in that country, the best employers value the employee voice, as well as the wider Social Market economic model.
Finally, Lord Heseltine and the trade union movement are not natural political bedfellows, yet it is ironic that he will have no fight with us to get this report accepted. His fight, if he has one, will be with the Treasury. The Department for Business, under Vince Cable, will have few problems with this report, even though Conservative Ministers in BIS always seem to think that deregulation is the answer (a view rejected in ‘No Stone Unturned’). But BIS has never ranked as highly in government as the Treasury and for as long as Treasury officials simply see themselves as the nation’s bean-counters, it will be hard to make progress. Of course, the Treasury must be responsible for tax and spending policy and for protecting the nation’s finances (which is not the same thing as deficit reduction at breakneck speed). But we also need Treasury focus on the real economy, those industries, companies and workers who earn the real wealth for UK plc.
Officially, Treasury Ministers will welcome today’s report. They can hardly do otherwise. But whether they, and the Prime Minister, implement its proposals will determine whether, ultimately, it sinks or swims. And whether the British economy sinks or swims with it.