Tag Archives: Brexit

A strong case for a UK industrial strategy: required reading for anyone concerned about post-Brexit manufacturing in the UK

For an analysis of the current position of the UK’s car industry, the range of pressures and issues it faces and its likely shape after any form of Brexit from a range of perspectives, turn to Keeping the Wheels on the Road, the third in the Bite-Sized Brexit books, edited by Professor David Bailey, the foremost commentator on the UK auto industry, Professor Alex De Ruyter, at the Centre for Brexit Studies, Birmingham City University, Neil Fowler and John Mair.

In a major contribution to the Brexit debate, seasoned industry experts, observers, commentators and representatives of the industry’s unions, provide arguments for cautious optimism through to rather shocked pessimism.

From Chapter 5: Just-in-time listening required

Co-authored by Richard Burden, Labour MP for Birmingham Northfield and chair of the All-Party Parliamentary Motor Group and David Bailey, Professor of Industrial Strategy at the Aston Business School.

They have no doubt that the future of automotive does not lie with internal combustion engines – whether diesel or petrol – and stress the vital importance of effective management of the transition

Their counter-intuitive assertion that decimating the market for new diesel engines has brought with it damaging if unintended consequences to the protection of the planet – contributing to the first aggregate rise in the greenhouse gases produced by new cars in more than a decade – sent the writer to search for an explanation online:

Ministerial mixed messages over diesel has undermined the capacity of manufacturers to manage that transition.

The industrial impact of failing to manage the transition threatens to be severe too, with UK engine plants of manufacturers like BMW, Ford and JLR all currently heavily dependent on diesel production.

Messages from ministers have been mixed: recent reductions in plug-in car grants standing in stark contrast to the incentives offered to motorists to buy zero-emission vehicles in counties like Norway. But efforts are now being made by the Government to mandate the expansion of the UK’s vehicle charging infrastructure which should include      on-street charging and monitoring of the performance of public charging points. The authors emphasise:

“A successful transition requires more clarity from the Government in support of both the production and take up of the electric and other alternatively powered vehicles that will be the future of the sector.”

The fact that a number of major manufacturers have yet to confirm plans to build in the UK the next generations of models sends out serious warnings signals that would be foolish in the extreme to ignore.

Ministers could show they are listening:

  • by reducing Brexit uncertainty through ruling out no deal,
  • ending mixed messages over modern diesel
  • and showing much more dynamism in supporting the transition to a connected, autonomous and alternatively powered automotive future,

Burden & Bailey insist that the innovative capacity and diversity that has made the UK automotive sector the success story it has become over the past decade remain in place and David Bailey, in his second chapter, asks for an upgrading in how the UK develops its future manufacturing plans:

“There is a strong case for UK industrial strategy to be afforded an institutional status similar to both UK monetary and fiscal policies. At the very least, it should be the subject of regular strategic long-term reviews. By giving it that sort of priority, the new government would send out the kind of powerful message that British industry and foreign investors need to hear given recent uncertainty.”

 

 

 

 

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Short-circuit damaging economic growth: from Douthwaite to McDonnell

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Richard Douthwaite stayed at the Centre for Holistic Studies in Mumbai as a young ‘unconverted’ economist. After reading ‘Short Circuit’ and – later – ‘The Growth Illusion’, CHS founder Winin Pereira was amazed and very pleased to see how Richard’s thinking had changed during that Indian tour. In his book, The Growth Illusion: How Economic Growth Has Enriched the Few, Impoverished the Many, and Endangered the Planet (1993), Richard asks:

Is economic growth improving our lives?”

In 1992, when the first edition of The Growth Illusion appeared, most people thought the answer was ‘Yes’. Today, however, there is widespread acceptance that, while growth might be necessary to generate jobs, the development path we are following isn’t making life better for the health of human beings and the environment.

The theme of this book is that, even if growth was beneficial at one stage in human history, it is now damaging.

The author, economist Richard Douthwaite, presents evidence of social and environmental damage caused by economic growth which has ‘enriched the few, impoverished the many, and endangered the planet’ (see chapter 11: “Growth in the Greenhouse”). The book looks at the effects of a policy of growth before and after the 1950s:

  • – it has affected national health
  • – damaged family, community life and the environment
  • – and forced companies to adopt new technologies before their impact on the environment can be assessed.

There is now a growing awareness of the mainstream economy’s vulnerability – reinforced by the government’s Brexit contingency measures; even in a wealthy country, the vagaries of free trade and the unimpeded movement of capital pose a threat not just to job security but to food and energy supplies as well.

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In a later book, which may be downloaded, Short Circuit: Strengthening Local Economies for Security in an Unstable World (1998) Richard advocates short circuiting the global structures and developing a local functional sustainable economy.

The concept of conventional economics focusing on the firm vs. the community and family is the primary reason we see so many communities go for trying to lure a major corporate saviour (at fantastic expense in foregone tax revenues and numerous social, environmental and economic costs) instead of trying to develop a sustainable standalone economy. Such firms threaten to move their operations to countries where the fiscal environment is easier, almost every government’s ability to raise an adequate amount in tax has been reduced.

Richard Douthwaite advises communities to ‘cut the monetary tie’ – or at least reduce the outward flow of money – by rebuilding an independent local economy capable of supplying the goods and services its people would need – establishing:

  • local currency schemes
  • community banks that enable local interest rates and credit terms
  • locally-based energy generating and saving schemes
  • low-external-input agriculture.
  • more cooperative commercial attitudes.

In the Foreword, colleagues Helena NH * and Ed Mayo (when NEF) points out that economic globalization developed because governments have been subsidizing international and long-distance trade through:

  • tax breaks,
  • cheap fuel,
  • and massive investments in the underlying transport and information infrastructure.

Even a child might ask, ‘Why must food be transported thousands of miles, when it can be produced right here?

This is not efficiency but economics gone mad. Wilderness areas and biodiversity are under increasing pressure as the demand for industrial resources grows. huge multinational corporations have replaced the hundreds of thousands of small businesses, shopkeepers and farmers that traditionally generated most economic activity and employment.

Unemployment in the industrialized world has soared while, in the cities of the South, populations are exploding because millions of rural families are being drawn away from local self-reliance by the promises of the consumer society – only to be plunged into urban squalor and hunger”.

Reverse the process of globalization: the system that has emerged suits nobody in the long run. The threat of mergers leaves even senior managers in permanent fear of losing their jobs and even billionaires cannot hide from the collapsing biosphere.

if the hidden subsidies for fossil fuel use were removed, local and national economies would become much stronger. Not everything could be produced locally, nor would there be an end to trade – there should be a better balance between local, regional, national and international markets. Large corporations should have less control, and communities more, over what is produced, where, when and how, and trading should be fair to both parties.

Governments should get together to curb the powers of the multinationals by negotiating new trade and investment treaties removing the subsidies powering globalization and giving local production a chance.

The world has now woken up to the environmental implications of ‘plundering the planet for profit’ as John McDonnell put it in Another World Is Possible (sold out on Ebay etc). At the end of his chapter, ‘Plundering the planet for profit’, he proposes:

  • developing an energy system based on local energy production, clean coal technology and wherever possible powered by renewable energy sources,
  • producing food in this country where possible instead of importing it from distant countries,
  • homeworking and video-conferencing instead of commuting long distances and flying abroad,
  • using public transport instead of driving,
  • reclaiming social ownership and control of our public transport, prioritising social and environmental goals,
  • encouraging manufacturers to produce durable and repairable goods.
  • ensuring that every home is energy-efficient and that houses are built to the highest environmental standards with the ability to generate their own power or served by local combined heat and power systems,
  • regulating industry, housing and planning with environmental concerns central to decision-making and
  • devolving power so that communities have the power to protect their local environment, setting enforceable carbon emissions and environmental targets.

See Local Futures’ constantly-growing library of examples of localization happening all over the world for news about people who have started to build alternative systems ‘without waiting for politicians to give us their blessing or for the world to burn’.

 

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Farm Groups request Stormont to put forward a bill for legislation on Northern Ireland farm gate prices: William Taylor

Farming families and rural merchants and traders in Northern Ireland by and large have hit the financial buffers. The convenor of NI Farm Groups, William Taylor (right), who farms in Coleraine, writes:

Farmers find themselves in the position where the sale price for the majority of commodities they produce does not even cover the input costs.  Banks are finding it increasing difficult to justify lending money to increasingly non-profitable farmers, instead rural merchants, vets etc are being forced into the position of secondary bankers to many farmers.  1 in 4 UK family farms are living below the poverty line (2012 figures) – all in all a disastrous situation with no future is now with us.

Meanwhile, large corporate food wholesalers, large corporate food retailers and, to a lesser extent, co-op and corporate large food processors, continue to maintain their enormous unsustainable profits.

No need for consumers to pay more, instead farmers want their fair share of current corporate food sector profits 

Rural NI must have its share of the financial food cake.  Northern Ireland Farm Groups currently including Northern Ireland Agricultural Producers Association (NIAPA), Farmers For Action (FFA) and National Beef Association (NBA) would make it clear that there is no need for consumers to pay more other than normal inflationary increases, instead we want our fair share of the money, currently going into the corporate food sector profits and it will take legislation to obtain it.

Currently individual family farmers are too weak in the market place to command a decent price for their produce and unfortunately to date, even with attempts by farm organisations across Europe, it has been impossible to bring farmers together in sufficient numbers and strength to overcome the power and influence of the corporates. They know this and abuse the fact every hour of every day to their profitable advantage.  Indeed, the EU has admitted publicly that:

  • food security is now top of the agenda
  • this is about agriculture not just any old industry and
  • farmers need a safety net – Westminster pay attention! 

When Northern Ireland’s government returns, it will have no choice but provide that safety net for Northern Ireland’s family farmers, if NI Plc is to succeed in lieu of the deficit from Westminster and Brussels.

The Groups’ proposal is timely in that for Northern Ireland the Brexit Flux and whatever outcome, cannot and will not succeed without profitable farmers in NI.  So what is the Groups proposal?  Quite simple, almost exactly the same as that submitted by Fairness for Farmers in Europe as a stakeholder to the 2010/11 CAP review: that of NI legislation being passed, stating that NI farmers must be paid a minimum of the cost of production, plus a margin inflation linked for their produce. If the ‘free’ market moves up then fine, the farmer will get the benefit, however, when it falls the legislation is there to provide the safety net limit.

Where is the evidence for the success of this proposal?

There is that age old saying, “When the farmer is doing well then everyone else is doing well” but sounder evidence is the fact that during the 30’s depression in the US, President Roosevelt could not get the US economy to move until he put money in farmers pockets.  NI farmers with money in their pockets would purchase products and services from an average of 123 different types of businesses from plastics, to machinery, to veterinary to accountants, to oil and lubricant suppliers, to building supplies, the list goes on.  Indeed there are only two types of wealthy countries in the world or a combination of both, ie those who are energy rich (ie oil and gas) or those with a good agricultural base, Zimbabwe a disastrous case in point.

How would legislation on NI farm gate prices work?

In recent years the Livestock and Meat Commission employed McKinsey’s International Consultants to professionally work out the cost of production including money for re-investment of beef and lamb production in Northern Ireland.  McKinsey’s did so very successfully by gleaning the information from the top beef and sheep farmers across NI.  They were totally independent of processor or retailer or even farmer influence, all of these factors a must.  These results could easily be done for all the food related commodities produced by NI farmers and adjusted for inflation or deflation every 6 months.

On a European scale this proposal would require flexible supply control, ie quotas, on all commodities but quotas without value.  However, in NI because we are small in comparison to the whole of the EU influence this would not be required.  The results of such legislation would in fact have a useful quota effect in itself.  It would create balance in the countryside creating good change in farming practices including:

  • A reduction in available conacre as owners decide farming is now a profitable option and farm their land themselves
  • One sector for example could not expand over and above any other sector, due to lack of land because the balanced requirement for land would come from all commodity sectors
  • Pressure on land would once again help farmers to increase good farming practices and invest in new technology and good farming methods such as instead of cutting and spraying rushes, lime would be applied due to money available; hedges would be brought under control, fences would be mended and replaced, drainage would be carried out. All this in harmony with nature as profitable farmers can easily produce more food in Northern Ireland whilst abiding by commonsense environmental laws.
  • d) There would be a certain amount of musical chairs of farming practices. In recent years many farmers moved into dairying or chickens because of the then perceived regular income which has since been eroded, many farmers may be perhaps beef, vegetables or other minded, they would therefore switch enterprise due to profitable options, thereby creating a balanced agriculture in NI.

It would in effect be a new dawn in NI agriculture, a land mark where farmers could afford to embrace new technology, to repair their sheds or build new more efficient ones, they could afford to purchase much needed new efficient safety equipment, they could afford to pay staff, to cut the current slavery hours currently being worked by farming families and their staff.

In fact the Groups can confirm that if this legislation is introduced it could create a minimum of 10,000-20,000 new professional on-farm jobs followed by approximately four times the number of related jobs.  Without exception, every farmer we have put the question to – ‘If legislation was in place to provide you with a minimum of the cost of production inflation linked plus a margin for your produce would you employ another member of staff or members of staff,  the answer is always a loud  – of course  I would!’

Furthermore, approximately 60% of NI farmers are part time – many of those would go full time if agriculture was profitable thereby creating a vacancy for others – by now you will have got the scale of this proposal for Northern Ireland.

Legislation

The legislation must go through on a welfare issue, for the sake of protecting farming families from corporate ravages for endless profit.

Due to the current rural financial crisis and after the experience of 2012’s wet Spring, 2017’s wet year and 2018’s extreme dry year, where many NI farmers were faced with extreme weather conditions and no spare money in their pockets, many being currently unable to feed their families, a welfare precedent was established: an ongoing increase in calls to farm crisis centres by farmers at the end of their tethers with corporates growing fatter by the day while rural NI has been drained dry of finance and resources.

Precedents are already being set with regard to the EU “free market”:

  • by the Scottish Government on minimum priced alcohol in supermarkets proposal on a welfare issue
  • by the Welsh Government’s success in already implementing this legislation
  • and for the second time in recent years the EU’s intervention in the free market by capping EU roaming charges by mobile phone companies.

In short on the plus side if Stormont were to legislate on NI farmgate prices as proposed by the NI Farm Groups, then virtually overnight a minimum of 10-20,000 initial jobs plus would be created and over the next 5 years there would follow an additional x4 multiplier of jobs. Every job on the farm in addition to the 15,000 processing industry jobs the Agri Food Sector would increase to almost 100,000 NI jobs minimum – an exceptional result which would allow NI Plc to firmly turn the prosperity corner and not look back.

To conclude, the Farm Groups hereby request that Stormont will put forward a Bill for Legislation on Northern Ireland farmgate prices as a matter of urgency under a rural welfare crisis where lives are at stake, stating that a minimum of the cost of production plus a margin inflation linked must be paid at the farm gate for all the food produced in Northern Ireland.

NI family farmers need your help in protecting their incomes from the corporates, just as you need them every meal time! 

William Taylor

56 Cashel Road, Macosquin, Coleraine,

 Co L’derry, N Ireland,

BT51 4NU

Tel/Fax  028 703 43419

Email  taylor.w@btconnect.com

 

 

 

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What Labour should do now: inspire, promote and oppose: Professor Paul Rogers

In an Open Democracy article, Professor Paul Rogers focusses on the critical need for the Labour Party to inspire its electorate and the wider public.

It should:

  • Inspire people with innovative approaches on many key issues,
  • promote specific examples which illuminate the potential of a Labour government,
  • and oppose by repeatedly focusing on the problems that the Conservative government will be facing.

Rogers continues:

“The dominantly antagonistic and right-wing national press will cause all the trouble it can, especially for Jeremy Corbyn but also for Labour as a whole. Even so, large-scale public meetings will get local print and broadcast media coverage, with these outlets much more sensitive to viewer and reader opinion. Remember that many provincial dailies have readerships in their circulation areas that are close to the combined local readership of the nationals. Moreover, social media lend themselves to useful coverage.

“In doing this, one way to have a real effect is to change the nature of the whole debate. This still means speaking to and for the alienated and the marginalised – as a transnational elite presides over a relatively sidelined majority. . But it also means bringing in major new elements, some domestic but other clearly international, the latter focussing on Britain’s potential role in a post-Brexit world.

“So here are three domestic and three international elements. They are not exclusive of others or of issues already to the fore. They are merely examples – and there may well be better ones.

First, domestic:

Business

Invest in SME support but strengthen financial regulation, especially in the finance sector itself. Demand hugely more effective action on tax avoidance, but fund HMRC to ensure it has adequate expertise. Seriously take on tax havens. Increase higher tax rates. Offer fiscal and other support for mutuals, cooperatives, co-ownerships and other forms of business organisation. Halt and reverse creeping privatisation of the NHS and education while investing seriously in many elements of the national infrastructure.

Transport 

Cancel HS2 and replace it with heavy investment in upgrading the capacity and quality of rolling-stock on all major intercity routes. Opt for modest increases in speed but more emphasis on passenger comfort, especially less overcrowding. Invest in rapid and systematic electrification across the north starting with the Trans-Pennine route. Take Southern back into public ownership now and return railways to public ownership as franchises expire but within franchise periods if companies fail to deliver to newly set higher targets for service delivery.

Energy

Cancel Hinkley Point and replace with heavy investment in renewables, with far more emphasis on wind energy, both onshore and offshore, and invest heavily in research and development of new systems for generation and especially storage. Reverse recent government downgrading of green policies and put far greater emphasis on energy conservation.

Second, international:

Post-Brexit 

Accept Brexit, but use it to argue for a new international role for Britain which combines continued commitment to Europe as a whole with far greater emphasis on worldwide links, not least the Commonwealth. Thus, argue for the UK being in the unique position of unrivalled connections to Europe, north America and the global south, in facing the common global problems of the failing neoliberal economic system and critical environmental pressures.

United Nations and Security 

Support and commit strongly to effective United Nations peacekeeping, including a commitment to lead investment into a UN Emergency Peace Service. Prepare to lead on this, including a highly trained multinational standing force with Britain at the centre. Make Britain as the lead player in this field. Accept that the wars since 2001 have been disastrous and have left countries, including Britain, less secure. Demand a complete rethink of strategies using the best available analysts given a free rein to propose new options, however radical. In the light of Chilcot and the continuing problems with ISIS, this will strike a chord.

Environment and Development

Emphasise that climate disruption is the greatest long-term security threat to everyone, but especially to the marginalised. Maintain the development budget in full but call for the reform of DfID towards a far stronger commitment to action on deep poverty and gendered and sustainable development, all in the context of persistent anti-corruption policies.

In all cases, argue with confidence and never fail to remember four elements:

* The Conservative government has already had to reverse core policies

* The 2008 financial crisis had its origins in the banking system, starting with the toxic loan debacle in the United States. It was not the fault of Labour, but Labour had failed to regulate the financial sector adequately. The party will not let this happen again

* Individual bankers, hedge-fund managers and the rest are not the problem – it is the system itself which is the problem, because it is far more deep-seated and entwined with the progressive failure of the neoliberal economic system after forty-plus years. Only Labour recognises this and is ahead of the times, not behind them. Repeat this with confidence

* The greatest global threat comes from climate disruption – repeat ad nauseam.

Source: https://www.opendemocracy.net/paul-rogers/what-labour-should-do-now (2016)

 

 

 

 

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