Why politicians need to pay more than lip-service to manufacturing

Editor's commentary

The strong-arm tactics now being adopted by President Barack Obama against bankers’ bonus payments and the wilder fringes of the gambling culture are likely to go down well with many engineers. There’s not much love or respect for a sector that appears hell-bent on profiteering – rather than genuine profit-making – and isn’t able to handle the consequences of its own activities.

But if there’s a degree of schadenfreude about the possibility that banks might receive a comeuppance, there might also be a degree of caution about prospects for other, closer parts of the economy. Such as manufacturing.

The new year has seen a spate of less-than-optimistic reports about manufacturing businesses, not just in chocolate. Companies cutting back because of lack of demand is one thing: and we could all do with an upturn. But the trend towards relocation of businesses out of the UK or other West European bases and into areas such as Eastern Europe or the Far East seems to have picked up again. 

In some cases, of course, you can’t argue with the logic. If you’re looking for long-term growth markets for commodities such as cars, for example, it’s going to come in markets that aren’t already saturated, even if some of them, such as some in Eastern Europe, have temporarily suffered far worse in the recession than any West European market.

But elsewhere we’re still getting assertions about UK competitiveness that are based on false or historic data on the importance of labour rates or the cost of logistics, or still in some places a “cheapest is best” philosophy. 

It’s time this kind of thing was countered. Politicians of all parties pay lip-service to the idea that the UK is a good place to make things and that manufacturing here is globally competitive. What we could do with, though, is credible detailed economic analysis of that. With that confirmation of what many of us already know, we could go to Obama and like-minded people and say: “Be as tough as you want on bankers: you don’t need to rely on them, and there’s a real economy waiting in the wings that doesn’t depend on hype, spin and greed.”