Britain needs a strategy to get it back to making things
again, Labour's spokesman on trade and industry tells Paul Anderson
The Sunday Times
was less than impressed by Labour's new industrial policy document, Making Britain's Future, launched by
Robin Cook earlier this month.
“The document marks a nasty U-turn away from the new realism
of the pre-election industrial policy developed by Gordon Brown, the Shadow
Chancellor,” boomed an editorial in its business section. “Labour's
corporatist, interventionist instincts are alive and putting the boot into the
free market. Those who thought Labour had forsaken the 'profits are dirty,
bash big business' mentality of the post-war decades are in for a rude
awakening.”
Cook is dismissive of such criticisms. “The right-wing press
has always tried to have it both ways,” he says. “On one hand, it accuses us of
returning to the past; on the other, it says that we're dumping everything that
we once believed in. These are two inconsistent statements.”
He has no time for the idea that there is a crucial
difference of emphasis between his own approach and Brown's: “His stress on
education and training fits very well with the emphasis we put on the
short-term character of British industrial thinking and the need for long-term
investment.” Far from ditching Labour's late-eighties message, he says, the new
document “builds on the policies of 1992”.
“If it has a more proactive tone, it is because the crisis
in British industry has deepened since Meet
the Challenge, Make the Change was drafted in 1989. What we have tried to
do is inject a sense of urgency and crisis. The competition is no longer only
Germany and Japan, it is also Taiwan and the other newly industrialised
countries which, on present trends, will pass us at the beginning of the
twenty-first century.
“We see a key, proactive role for government in developing
an industrial strategy and co-ordinating the other players. This is not an
attempt at some kind of western version of central planning. We're not
suggesting that it's the job of civil servants to tell industrialists how to
run their businesses. But it is the job of government to create the conditions
in which those businesses can succeed.”
So is there a role for social ownership of industry? Cook
believes that there is. “Government should be a major player in industrial
strategy. That may mean, from time to time, that the government should take a
stake where doing so assists financial reconstruction or investment.
“Look at the case of Daf. When I visited Holland to discuss
the Daf crisis, I met a Minister from the Dutch Labour Party (PvdA), who was
anxious to express, first of all, that he was following a national policy not
simply a PvdA policy, and that, secondly, because Holland had an industrial
strategy, the Government could identify the circumstances in which it was
appropriate to intervene. Daf is at the forefront of truck technology and is
critical to a whole number of other suppliers – so the government took a
holding of equity in Daf, not as a subsidy but as an investment. When the
company returns to profitability, it will sell its stake.
That sensible, practical, far-seeing approach is light-years
away from the approach of the British government. Nobody's talking
nationalisation, but for the British government to be willing to take equity
holding as part of a co-ordinated financial reconstruction and rescue plan
might have been sensible.”
According to Cook, the most important innovation in Making Britain's Future is its analysis
of the systemic problems that have held back British industry: the weakness of
industry compared with the financial sector, the outmoded structure of the
British joint-stock company, the over-centralisation of economic power, the
instability of the business cycle (which discourages long-term investment) and “the
cultural bias against industry”.
The document argues that Britain needs an industrial strategy
“Builot on a national consensus that recognises the importance of
manufacturing, and Cook is at pains to emphasise that Labour's critique is not
purely party-political.
The Conservatives have made things so much worse in several
major ways,” he says, “But we need to look beyond their ghastly errors at the
underlying reasons that we've had an industrial decline going back a century.
Getting the Conservatives out is not enough to reverse it – although it
certainly is a start.”
In policy terms, says Cook, there are three areas where
Labour is making a particular effort to rethink its position. “First of all,
we're proposing a major change in the architecture of industrial and commercial
life in Britain. There are some interesting parallels here with the analysis
that Labour has developed over the past decade of the British political
constitution and its programme for modernising it and devolving political
power from the centre. Companies' constitutions need the same modernisation,
and economic power needs the same challenge to its centralisation and
concentration.”
Secondly, he continues, Labour has some new ideas on
investment. “Of course, we have always stressed the importance of investment,
but we're now looking at new instruments of investment, trying to involve
institutions in industrial investment that have previously not been involved,”
he says, mentioning in particular the potential for getting pension funds and
building societies to take long-term stakes in British industry.
“The third fresh point that we're proposing is a new
partnership between government and industry, taking on explicitly the argument
of the free marketeers that the best thing that the government can do is
nothing. Not only is this wrong in theory, it is also pointless in practice
because all of our competitors have governments which are backing and helping
their industry.”
A particular target for intervention is the defence sector,
currently reeling from post-cold-war cuts. The defence market is a market
that's entirely created by government and it's now collapsing precisely
because of government decisions,” says Cook. The government has decided to buy
less, for reasons that nobody is challenging. If you have a market in which
government has called into being a whole raft of producers and then decided
that it is going to cut the scale of that market, it has a plain obligation to
intervene again to help those companies find alternative markets.
The defence industries have two things lacking in civilian
industry: sophisticated plant and a skilled workforce. If there is one decision
that this government has taken in the past year that borders on criminal
negligence it is the way in which it has simply taken a hatchet to the defence
research establishments with no attempt to plan the transfer of their skilled
workforce with a background in research and development into industry.”
As well as being Labour's industry spokesman, Cook is the
most senior Labour figure to have pushed consistently hard for the introduction
of a system of proportional representation for the House of Commons.
While many are disappointed that Labour's Plant Commission
on electoral systems decided last month to recommend a non-proportional system,
the “supplementary vote” dreamt up by Dale Campbell-Savours and based on the
alternative vote, Cook is sanguine.
“My response to the decision is that this is a breakthrough,”
he says. “Having spent two years studying electoral systems, the Plant
Commission has come to the conclusion that that the first-past-the-post system
is inappropriate to the next century. I welcome that.”
Nevertheless, he is not prepared to back a supplementary
vote system or any other alternative vote system without major qualifications. “It
is interesting that a lot of people as individuals who have travelled down the
road to reform have moved first through something like the alternative vote. I
myself stopped off for a little while at the alternative vote before moving on
to proportional representation. We've got to encourage the party collectively
to travel down the same path. The party would be wrong to adopt AV or SV on its
own. The FPTP system has polarised Britain by region in terms of representation.
More than 1 million people vote Labour in the south of England and we get a
couple of MPs.
“AV and SV do nothing to alter that regional polarisation,
nothing to increase Labour representation in the south. By their very nature,
AV and SV give power to second preferences. Labour is rarely the second
preference: the party of the Centre witi always be the second preference. .. . .
“As a means of electing constituency representatives, SV is
better than FPTP. But for the system to work, we need to supplement SV with
added members on the basis of regional elections.”
