Labour’s industrial strategy will rebuild and transform the UK economy
Unlike current Conservative policy, Labour’s strategy will overhaul the economy in every region of the UK, writes Chi Onwurah
At the last Prime Minister’s Questions before conference season, when Jeremy Corbyn reeled off the gloomy list of economic indicators, the Tories jeered and yah-booed to try and drown out the reality of the economy they have made. An economy that clearly is not ‘working’ for many people in our country.
Brexit uncertainty is mounting, inflation is rising, growth is faltering, business confidence is at a six-year low, the euro is at a record high against the pound and Britain hasn’t had a pay rise since the financial crash.
As IPPR’s Commission on Economic Justice found in its recent report, Britain’s economy is broken, ‘creating neither prosperity nor justice’. Fixing this requires real action from government.
But what we have seen in the last few months is ‘Groundhog Day’ – a Tory government re-announcing the same pots of money over and over again.
The economic model created by Margaret Thatcher in the 1980s has seen London and parts of the south of England vastly outstrip the rest of the country in terms of wealth production. I was studying electrical engineering at Imperial at the time and it seemed she was determined to destroy every engineering job in the country.
We are now the most unequal economy in Western Europe, with median earnings in inner London a whole third higher than those in Tyne and Wear.
Productivity, measured by output per worker, is 32% above the national average in London and 20% below the national average in Wales and Northern Ireland.
And only in London and the South East has GDP per head recovered to pre-crash levels, with regional economies drained of their vitality by Osborne’s zombie economics.
Industrial strategy can heal these divisions. It is about building the economy we want, choosing our own national future rather than leaving it to the caprices of the market.
This government does not seem particularly interested in that, despite Theresa May’s repeated promises to tackle our country’s “burning injustices”.
Instead it’s ‘Back to the Future’ for regional growth with an industrial strategy that would not look out of place in 1985.
Research from Sheffield Hallam University shows that the industrial strategy will impact only 1% of the economy by employment – overwhelmingly in the South East.
And this government’s focus on research and development in only a few sectors will largely benefit facilities in affluent parts of southern England.
To take one example, the Cambridge area – population 285,000 – has almost as many R&D jobs as the whole of the north of England – population 15.2 million – and more than Scotland and Wales combined.
Labour’s industrial strategy will rebuild and transform the economy in every region of the UK.
Backed up by our £250bn National Transformation Fund, the National Investment Bank and a network of Regional Development Banks, our industrial strategy will spread wealth across the country – not just concentrate it in pockets of affluence.
It will be wide-ranging, setting out national missions to address the societal issues of our time, from climate change to job automation. These are challenges that are experienced in every part of our country – and they can only be tackled nationally.
A Labour government would engage with sectors – setting up sector councils modelled on successful examples such as the Automotive Council – but unlike the Tories this won’t be limited to a favoured set.
We’ve signalled our commitment to creating prosperity across the entire country with our pledge to found a new Catapult Centre for retail – the UK’s largest private employment sector and one wholly neglected by the government’s strategy. Every part of the country has jobs in the retail sector, and boosting the take-up of innovation will be necessary to create higher-wage jobs and raise productivity.
There is still time for this government to ‘Do the Right Thing’: to scrap its narrow and unambitious industrial strategy, and adopt Labour’s approach to genuinely transform the economy for the many, not the few.
If it does not, then it will be even clearer that only a Labour government can provide what is really needed: ‘A New Hope’ for Britain’s regional economies.
Chi Onwurah is Labour MP for Newcastle upon Tyne Central and Shadow Minister for Industrial Strategy
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