IT REALLY is a sorry state of affairs when it takes the billionaire head of a Swiss-based multinational to urge the British government to do something to stem the “catastrophic” decline of UK industry.
Readers might remember my column a month ago when I revealed that the man in charge of industry in Government does not appear to have made any set-piece speeches in support of manufacturing.
Now Sajid Javid, the Secretary of State for Business Innovation and Skills, might be ideologically opposed to state intervention. And as a free marketeer, he might he even be opposed to the existence of his own department.
But he should be aware, if it has not occurred to him, that a great many jobs depend on the success of manufacturing, particularly outside of London and the South East, and his counterparts in many of our rival nations are doing all they can to support strong industrial growth through favourable and long-sighted policies.
Jim Ratcliffe is the chairman of Ineos, the $54bn-turnover chemicals giant based in Rolle, a municipality in the canton of Vaud in Switzerland.
He also spent formative years in Yorkshire, attending Beverley Grammar School and living in Hull.
In an article for the Telegraph, he argued that a tipping point had been reached in Britain’s economy, highlighting figures from the World Bank in November that showed the halving of manufacturing to just 9.4 per cent of our output, the lowest level on record.
Just two decades ago, the share was 22 per cent of GDP, comparing favourably against Germany’s 23 per cent.
Mr Ratcliffe said: “The really shocking statistic though is that Germany today is little different from 20 years ago whereas the UK has collapsed spectacularly. That’s a loss of half of the country’s manufacturing capacity in a generation.
“Whereas this seismic shift in UK manufacturing may seem like a minor tremor in ‘services rich’ London and many southern counties, it is a catastrophe in slow motion in many parts of the North of England, Wales and Scotland, as quality employment prospects either degrade or disappear.”
The Conservatives have given every indication that they do not really care about these parts of the country, as there are few votes to be won in these traditionally Labour heartlands. This is a problem, especially when you have an opposition as weak as Labour and the Liberal Democrats, as the Tories will believe they can get away with favouring their own constituencies for investment.
For Mr Ratcliffe, the answer is to make the regions as attractive as possible to international investors, who can put their money into new plants and new products to be made in the UK.
He said: “In today’s globalised world, investment decisions are always compared and contrasted with alternative locations abroad – should we invest in the UK, or alternatively in Germany or the US or the Far East for instance?”
He runs through the things that international investors like and finds the UK lacking in competitive energy prices, skilled workers and positve, constructive unions. He concludes that the UK lacks USP and suggest a single-digit tax rate for manufacturing. I asked BIS to respond to his comments.
A BIS spokesman said: “Manufacturing contributed £170bn to the UK economy in 2014, supporting 2.6m jobs, and we are working closely with the sector to maximise productivity.
“We are doing this by cutting red tape by a further £10bn, boosting skills by creating three million apprenticeships, supporting industry with an extra £1bn in aerospace and automotive R&D and investing £6.9bn in the UK’s research infrastructure.
“The Government is taking measures to ensure that we create the right economic framework and conditions that will enable UK companies to succeed in increasingly competitive global markets.”
I’m hardly bowled over.