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Look north for industrial redevelopment

There’s a lot of talk around at the moment about regional redevelopment. George Osborne is proposing a high-speed train line to link Leeds and Manchester which, as we saw in our poll last week, could be a surprisingly popular policy, considering the continuing implacable opposition to HS2. Meanwhile yesterday, Labour leader Ed Miliband proposed the creation of ‘combined authorities’ with northern cities pooling resources and allowing regional authorities to keep and reinvest business rate revenues to help them encourage new business to form and create jobs.

What’s behind this sudden interest in the regions north of Watford? Well, these are politicians speaking and we’re a year away from a General Election, in the midst of a feeling that politics is too insular and doesn’t care about anything outside the ‘Westminster bubble’. Electioneering is probably a major factor in these announcements. But that doesn’t necessarily mean that they’re bad ideas.

’Electioneering is probably a major factor in these announcements. But that doesn’t necessarily mean that they’re bad ideas

The fact is that without some regional rebalancing, the UK economy will still be precariously unbalanced towards services and banking. London (and the southeast, but particularly and increasingly London) dominates the economy, but it isn’t and never has been an industrial powerhouse. With a few exceptions, such as mining in Kent and car building in Dagenham and Luton, the prosperity of the capital and its surrounding region has come from finance and trading. Britain’s industrial muscle was always further north: the foundries and factories of the Midlands, the steelworks of Yorkshire, Lancashire’s textile mills, the shipyards of the Tyne and the mineral industries that fuelled them. And that’s without even mentioning Scotland.

AMRC

Sheffield, for centuries a centre of metalworking expertise, is the home of The Advanced Manufacturing Research Centre

Manufacturing is recovering in the UK, but it’s not outpacing services; that imbalance which was so disastrous when the banks crashed in 2008 is still there. And that historic industrial muscle, which atrophied in the 1970s and 1980s (though in truth, it had been in decline from the 1920s) still hasn’t been rebuilt. International economics and globalisation have changed the way that things are built and where they are made. We can’t expect to turn the clock back.

But it’s undoubtedly true that the industrial culture, for want of a better expression, is more strongly ingrained outside London. Call it snobbery if you like, but apprenticeships are taken more seriously in the Midlands and the North; and there’s a greater emphasis on industrial skills. It’s why companies like Bombardier choose to stay in Derby; on a recent visit there I was told ‘it’s a railway town, the skills are here and the supplier base has always been here.’ It’s why the High Value Manufacturing Catapult is based in Coventry and Sheffield.

’The industrial culture is more strongly ingrained outside London

Because of these factors, it might be said that if you want to revive manufacturing and engineering as serious money-making industries, you’d be best advised to look to the North and the Midlands — outside the Southeast at any rate — as the place to do it. And that’s going to need some positive action from central and local government to make sure that funding is available to start businesses, acquire equipment and train staff. It’s probably still to early to say whether the abolition of regional development agencies and their replacement with local enterprise partnerships (of which Labour’s plans look like an extension) has had any effect; LEPs are voluntary and have only existed since 2010.

metal2

So a realisation that we have to rebalance the country has to be welcome, and shouldn’t be dismissed as empty soundbites or an attempt to weaken other parts of the country. Investment in infrastructure, education and entrepreneurship are all needed, so that development of advanced engineering and manufacturing can develop into the establishment of businesses that build things and train and employ the people that know how to build.


Readers' comments (19)

  • Pardon my cynicism, but didn’t the southern softies use asset stripping to take the money from the north and close most of its factories? This wealth was used by the institutions to generate the fabulous growth of the “finance sector” in the 1980s and 1990s that we now know was all smoke and mirrors.
    The only sensible suggestion that I have seen for reviving the north is that of Michael Hesseltine. This means reducing the money that flows to central government by devolving more to the provinces.
    Maybe the southern softies are frightened that the threatened loss of their grouse estates could spread south if Scotland does devolve??? I’m absolutely certain that they have no intention of reducing the north/south divide, this is clear from UK history.
    Parliament should ideally be relocated to a northern town, but as this won’t happen we need the Heseltine plan.

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  • Watford or Watford Gap?

    Engineering companies make the mistake of placing themselves in remote areas because it was cheaper or there was a tax break offered. Then they wonder why they can't recruit easily! Skills is the priority and then salary, costs etc. can come second. If this means placing yourself in London, Cambridge, Oxford etc. so be it. Look at why London does well and emulate it. Go to the skills.

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  • Has Engineer (previous commenter) read the article or ever been to the remote and depopulated conurbations of Greater Manchester, West Midlands or West Yorkshire? As the article states that the skills and 'culture' are already in these places.

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  • Mr. Nathan, before you write your next article on this subject go and do some research. Your statement “With a few exceptions, such as mining in Kent and car building in Dagenham and Luton” shows a staggering ignorance of this country’s manufacturing past. And geography too – Luton is north of Watford by the way (or do you mean Watford Gap – not the same place at all). Where exactly do you consider “the North” to start?
    The fact we are over-reliant on the financial sector and the power of London was not the cause of the decline in manufacturing, it is the result. Industry managed that decline all on its own by making (intermittently, strikes permitting) poor quality, overpriced goods, viz. British Steel, British Leyland, NCB, British Shipbuilders et al.
    You are right when you say that globalisation has changed where things are made. Steel making, mining and shipbuilding aren’t ever going to be major forces in UK industry to the extent they were in the 60s and no amount of government initiatives could make that happen. What we do in the future will not be based on the past and the supposed skills lurking in specific regions. Bombardier might choose to tell you they stayed in Derby because of the wonderful skills locally; but the fundamental reality is it stayed because it got the London Crossrail contract and if it hadn’t it would have shut in a heartbeat.
    The fundamental problem for UK industry, in whatever region is that in this globalised economy there are no, with the possible exception of Rolls-Royce, UK owned global-scale companies. We are thus at the mercy of the likes of Tata, Toyota, Nissan, BMW, Siemens and, possibly Bombardier etc. to keep the bigger factories here open. Government programmes to help start-ups and SMEs are all very well, but will these ever turn into the global players we really need to turn the UK economic tide back in favour of industry? No they won’t; we have lost the ability to compete with the likes of Germany and deluded ourselves that somehow with little-bit-here, little-bit-there approach we someday can. At least put aside this North-South divide tosh and think as one country.

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  • Maybe I’m nit-picking – but this article seems to see ‘Industrial culture’ as pretty backward looking to the late C19, ‘heavy’ industry. The industrial culture of the 30s -70s (outside the war) was surely based on or at least had a significant component around ‘light industry’ –based partly on the growth of domestic consumption, from Hoovers – recall the iconic Art Deco Hover building on the A40) to fashion, fridges and I’m sure golf balls etc. London and the south east both expanded partially due to this and no doubt there was a connection to the rise of finance (HP credit, insurance) and retail and other services. This kind of industry may have been less visible and ‘muscular’ but (and it is worth researching to be sure) it was a significant part of the Post WWII boom and together formed very ‘serious money making’ industries (and possibly still do).

    I think skipping out this period of industrial growth means missing out on what Industrial/manufacturing/engineering culture means in C21 and what can really be learned from the past to head towards the future.

    Sometimes I wonder if the Industrial sector does itself few favours by elevating ‘noble’ engineering/industry such as trains & locomotives and distancing itself too much from services and retail. After all for retail we are always told we consume too much (it’s making us (and the planet) ill say some) – but a successful city like London was based on a three way working together of industry, services and (proper)finance.

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  • Not too long ago when I was growing up in ‘the frozen North’, it was possible to get virtually anything made within a few square miles. Then came the decline in many Northern industries and this was no longer the case. However, this doesn’t mean that the skills no longer exist or that it is impossible to revive the North.
    The argument that engineering companies made the mistake of placing themselves in remote areas (The North?) where there were no skills is patent nonsense. The North (including Scotland) has some world class Engineering Universities and continues to generate leading edge technologies (anyone for Graphene?).
    The reality is that the North is lacking investment in infrastructure and a clear and consistent industrial policy from central government. I’m all for political parties investing in the North (and I don’t really care if they are trying to win votes). If the end result is to liberate some of the latent talent and start to reverse the long decline in Northern manufacturing then it has to be a good thing.

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  • Invest in the north - about time too. But please without using this devolved power to increase again the number and layers of "local" government. I suspect the real motivation from politicians is more jobs for the boys at ever higher salaries doing very little of benefit to the local workforce. Now if they delayered themselves first it would be a nice change. As had been said above, the skills are available, the willingness to succeed is there, but if all the "new" money is sucked into politicians pockets we will see little except an increasing drain on tax-payers.

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  • Very interesting thesis here on the idea that it was Post War govts that actively restricted Industrial growth in Birmingham (and by association whole West midlands) as it was considered too sucessful and was see as a 'damaging influence on the more northern cities that were actually stagnating - just shows that this debate needs more nuance before short sighted policies are introduced. It also shows the influence of the restricting green belt on industrial growth (I guess London had more empty space to fll than Birmingham)
    http://www.economist.com/blogs/blighty/2013/05/birmingham

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  • @Anonymous | 2 Jul 2014 6:04 pm

    Manchester, Leeds, Glasgow etc. etc. all come into the equation. As I said the companies must go to the skills. If the skill base is in Manchester than go there, if it is London then go there. Too often do I see companies go to remote regions because cost has become a driver and then the result is poor recruitment. These businesses have failed. If Manchester is the place to be then Manchester needs to get out there and tell the world and show businesses. Always go to the skills, this is why London does so well. The skills won't move from London as they won't from Manchester etc. Form a stronghold of these skills and do everything it takes to keep it.

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  • The question remains; what skills are where and why?

  • @Edward | 3 Jul 2014 12:53 pm

    By remote areas I mean away from significant concentration of businesses or towns/cities not North or South of the country. Many remote place companies in the South fail too. Engineering companies have made the mistake of chasing a tax incentive or lower costs by placing themselves in an area that doesn't have the skills to support the business. If an area has the skills them it needs to get out there and sell itself. If it is already doing this then I'm afraid the question of competitiveness comes into play. The area would need to question whether it was competing the right market or has the skills it needs. This is why high value manufacturing has been successful in the UK. It was a result of companies evolving to the market needs and into an area it could be competitive in.

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