Speech to the EEF manufacturers organisation, formerly the Engineering Employers’ Federation, which works with manufacturing, engineering and technology-based businesses in the UK – edited, emphases added
The launch of the ‘Build it in Britain’ campaign, Labour’s campaign to ensure a stronger future for industry with better jobs and opportunities here in Birmingham and in every part of Britain.
While the finance sector has continued to grow, a decade after the bankers’ crash and the super-rich have grown still richer. For too long, many of our communities have lost out in the global economy free-for-all. The few have succeeded, but at the expense of the many.
Mr Corbyn thanked John McDonnell, the Shadow Chancellor of the Exchequer, for all the work that he has done over the last three years to change the economic debate in this country, away from the dogma of austerity and cuts without end and winning the argument to focus instead on the need for investment if we are to succeed in the future. Rebecca Long-Bailey, Shadow Business Secretary, was also thanked for developing Labour’s plans for a real industrial strategy that will transform the shape of our economy and ensure prosperity is shared by every region and nation of the UK.
The thinking that it’s good, even advanced, for our country to manufacture less and less and to rely instead on cheap labour abroad to produce imports is rejected.
While the Conservatives are continuing as they always have done – skewing policy to the narrowest interests in the City of London while ignoring the needs of the vast majority in their bungled Brexit negotiations – Labour is setting out a genuinely new economic direction for our country.
This is necessary because for the last forty years a kind of magical thinking has dominated the way Britain is run. It has been said that it’s good, even advanced, for this country to manufacture less and less and to rely instead on cheap labour abroad to produce imports while we focus on the City of London and the financial sector.
While many economics professionals, politicians and City types insisted this was all a strength, the banking crash confirmed it was in fact a profound weakness.
A lack of support for manufacturing is sucking the dynamism out of our economy, pay from the pockets of workers and any hope of secure well-paid jobs from a generation of young people.
It must be Labour’s job in government to reprogram our economy so that it stops working for the few and begins working for the many. We will build things here again that for too long have been built abroad because we have failed to invest. Because Labour is committed to supporting our manufacturing industries and the skills of workers in this country we want to make sure the government uses more of its own money to buy here in Britain.
The state spends over £200 billion per year in the private sector. That spending power alone gives us levers to stimulate industry, to encourage business to act in people’s interests by encouraging genuine enterprise, fairness, cutting edge investment, high-quality service and doing right by communities.
Why is the Government sending a £1 billion contract and all the skilled jobs, tax revenues and work in the supply chain to build three new Fleet Solid Support Ships for the Royal Fleet Auxiliary overseas when we have the shipyards to build them here? There are workers in Liverpool, Belfast, Rosyth and Plymouth who are keen to do that work but when I visited some of those shipyards I learned something else too – there are not enough workers being trained here in the UK to meet the potential demand.
Labour is determined to see public contracts provide public benefit using our money to nurture and grow our industries and to expand the tax base
We have plenty of capacity to build train carriages in the UK and yet repeatedly over recent years these contracts have been farmed out abroad, costing our economy crucial investment, jobs for workers and tax revenues. Carrying on like this is simply not sustainable.
Between 2014 and 2017 Network Rail awarded contracts worth tens of millions of pounds to companies outside the UK while the NHS awarded contracts worth over a billion.
In the same period the Ministry of Defence awarded contracts elsewhere worth over £1.5 billion pounds even though we are under no obligation under either European or international law to open up defence contracts to overseas bidders.
The next Labour government will bring contracts back in-house, ending the racket of outsourcing that has turned public services into a cash cow for the few.
We will use the huge weight of the government’s purchasing power to support our workers and industries, using a three-pronged approach:
- new procurement rules so that government supports jobs and industry;
- investing in infrastructure to support companies here in Britain to keep goods flowing efficiently and costs low;
- increasing investment in education, skills and lifelong learning through a National Education Service that we will create;
- doing much more to support small and medium sized enterprises to participate in the tendering process instead of them being dominated by faceless multinationals.
Too often, we have been told by Conservatives who are ideologically opposed to supporting our industries that EU rules prevent us from supporting our own economy. But if you go to Germany you’ll struggle to find a train that wasn’t built there, even though they’re currently governed by the same rules as us.
When the steel crisis hit in 2016 Italy, Germany and France all intervened legally under existing state aid rules but our government sat back and did nothing. We will include public interest into these big public contracts, as was done with the contract to build the High Speed 2 railway.
By considering public interest such as job creation and the supply chains, we can grow our economy in a way that works for everybody. In the words of the Public Accounts Committee “there has emerged a small group of large companies which are expert at winning contracts but do not always deliver a good service”.
The next Labour government is committed to creating high quality jobs in every region and nation of the UK, to develop new industries and support good domestic businesses – large and small – extending the rights of local authorities in parts of the country worst hit by forty years of industrial decline to be exempt from some World Trade Organisation rules, as some US states are, and therefore be able to require provision for local suppliers and jobs in public contracts.
Industrial strategy – one example of this, the solar industry.
Once innovators, we are now falling back as the industry takes off across Europe. And why? British solar firms were hit by cuts to subsidies in 2015 and 2016 and changes to business rates for buildings with rooftop panels, to save a few pounds in the short term, costing us jobs and innovation.
As a result, between now and 2022 France is forecast to add five times as much solar capacity as the UK, Germany ten times.
Our strategy will help us upgrade industry to secure good jobs, win public contracts and compete on the international stage. It will help us build a clean, green 21st century economy, right here in the UK, building solar, wind farms and tidal lagoons to help us to tackle climate change.
It will focus on creating clusters to boost domestic supply chains to develop the virtuous cycle, where the success of one industry or company helps others.
We’ll give support to the sectors that we need to deliver the public contracts, to radically upgrade our creaking infrastructure, a core part of our industrial strategy.
investment plans to reprogram our economy for infrastructure, industry and for people, so that it works for every town, city and village in the country
It is why we are committed to a National Education Service which will provide both academic and vocational education on an equal footing to anybody that wants it, from cradle to grave. We cannot continue to see education as a commodity to be bought and sold, it must be there to give people the skills they need to flourish throughout their lives, equipping them with the skills we need to thrive.
Wanting to build it in Britain is not turning away from the world, nor some return to protectionism or Trump-style trade wars
It is about changing course so that people feel real control over their local economy and have good jobs that produce a consistent rise in pay and living standards, in every part of the UK. That’s why we are so determined to help companies in the UK that export their goods
Unlike the Conservatives, we know that after Brexit the single biggest assistance we can give our exporters is securing full, tariff free access to our biggest export market, the European Union. It’s so important that we seek to negotiate a new, comprehensive UK-EU customs union, with a British say in all future trade deal and arrangements.
BMW, Airbus, and companies after company has warned of the real and damaging effects of Conservative customs chaos. Theresa May and her warring cabinet should think again, even at this late stage and reconsider the option of negotiating a brand-new customs union. This decision needn’t be a matter of ideology, or divisions in the Tory Party. It’s a matter of practical common sense.
The Labour Party and the Institute of Directors, the CBI and the TUC agree, we need to negotiate a new customs union.
A botched Tory Brexit will sell our manufacturers short with the fantasy of a free trading buccaneering future which in reality would be a nightmare of our public services sold to multinational companies and our country in hock to Donald Trump whilst we all eat chlorinated chicken.
The rise of finance is linked to the demise of industry
Between 1970 and 2007 finance sector output grew from 5% to 15 % of total economic output. Manufacturing meanwhile decreased from 32% to 12%.
The next Labour government will rebalance the economy so that there is prosperity in every region and nation. We will do this by setting up a national investment bank and a network of regional development banks to provide capital to the productive, real economy that secures good skilled jobs.
We will focus relentlessly on ending the housing crisis caused by the Conservatives and their uncompromising commitment to the free market, building homes for the many not investment opportunities for the few and with them will come a new generation of zero carbon homes, creating new training opportunities and skilled jobs.
And we will shift taxation to disincentivise financial speculation, for example with our financial transaction tax, so that we all share in the wealth we all create. We want an economy with high wages, high levels of trade union representation for workers and high levels of educational opportunities for everybody.
We’re offering a new deal for businesses that want to get on.
The very richest companies must pay a bit more tax and pay their workers better and in return we will train our people to have the skills the economy needs, upgrade our creaking infrastructure and provide the planning and support to help industry compete on the world stage.
Firms our government does business with will have to:
- properly pay their taxes,
- respect workers’ rights,
- provide equal opportunities,
- protect the environment,
- train their workers, pay their suppliers on time
and end boardroom excess by moving to a 20-1 limit on the gap between the lowest and highest paid.
The deal that we want to make with businesses will benefit the whole economy.
We can get rid of the magical thinking of the free market that has led to a minority becoming extremely rich at the expense of everybody else, replacing it with a new economy, transformed so that it’s run for and by the many, not the few.
And we will forge a new relationship between workers, manufacturers, communities and government to end the unregulated bankers’ rip off which has dehumanised our values and our economy while allowing a few to profit at the expense of the many.
For too many of our people today the spread of insecure work, low pay and zero hours or temporary contracts is causing stress, debt and despondency. Labour will reprogram the economy so that it works for the people of Britain and not against them. Now is the time to put people’s jobs and living standards first. We want to see well-paid jobs in the industries of the future, fuelling the tax revenues that fund public services and the NHS, rebuilding communities and increasing living standards for all. And we will build this economy, this future fair for all, right here in Britain.
To read the full text of Jeremy Corbyn’s ‘Build it in Britain’ speech at the EEF Technology Hub, go to https://labourlist.org/2018/07/build-it-in-britain-again-corbyns-full-speech/.