Perils of protectionism

The sight of engineers and construction staff walking out of some of the UK’s key energy facilities in protest at the use of overseas labour was a reminder of how frayed the nerve endings of the nation have become.

When times get tough, the arrival of foreign contractors to do work that could be done by skilled local people is highly unpalatable to those left staring in from the outside.

Incidents such as those at the Lindsey oil refinery in Lincolnshire are the first UK manifestations of a phenomenon that is, in various forms, rearing its head around the economically active world.

This phenomenon has many names. Call it ‘British jobs for British workers’, call it ‘Buy American’, call it looking after your own, call it protectionism.

The first point to make about a drift towards protectionism is that it is not only understandable, it is in many respects rational. That skilled employment on a major engineering project should be available, on a level playing field, to skilled local workers who would otherwise be unemployed sounds more than fair, it sounds like common sense. If that is not happening, it is bound to inspire anger, resentment and a sense of injustice.

The trouble is, protectionism in its wider forms would be profoundly dangerous for a nation such as the UK. Check out any period in history you care to name. Any economic success this nation has enjoyed has been based on trade and on inwards investment by overseas concerns.

Even the financial services boom of the last decade, dubious though it turned out to be, was based on the flow of foreign capital into and through the UK.

However seductive it appears, the notion of turning inwards and putting up the barriers would be a double-edged sword indeed. We will quickly find that everyone can play that game and in many cases we will be on the losing side.

Instead, is there not a case for being more, not less, outward-looking? Nowhere is this more true than in the UK’s technology-led industries, where international co-operation and trade are vital for success. As The Engineer has pointed out many times, there are numerous sectors of the technology economy where the UK enjoys a genuinely world-class position.

There are many UK-based companies that compete for and win business around the globe. They do that because they are the best in the business, and even in a global downturn that counts for a lot.

Now that the country and the government have finally woken up to the importance of our technology-led industries, it is time to promote those virtues more aggressively than ever.

Whether it is to India, China or the rest of the EU, the message should be the same – we’re still open for business.

Andrew Lee, Editor