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Peter Mandelson: If we cut back investment, we will wreck the hope of growth
Politics in Britain for the coming years will be about a constraint and an opportunity.
The constraint will come in the need to pay down the borrowing
necessary to address the banking crisis and the recession. The opportunity lies in the massive markets of a returned-to-growth global economy and a wave of technological changes that will reinvigorate British manufacturing and the industries that support it.
This is why the Government is investing 150m to help UK advanced manufacturers seize the opportunities in new sectors, markets and technologies.
Yorkshire has a big part to play with its strengths in advanced manufacturing, the creative and digital industries, pharmaceuticals and healthcare.
I saw this for myself when I opened the Advanced Digital Institute's new offices in Airedale, Bradford last month.
The ADI is a powerful investment in Britain's future, fostering innovation at a time when it is tempting to cut back on research and development spending.
It will help turn innovative ideas into the leading commercial solutions of tomorrow, helping businesses thrive in Airedale and beyond and boosting the UK's competitiveness as a knowledge economy.
But alongside the innovative companies that the ADI will help to
flourish, more traditional Yorkshire manufacturers like Corus are still vital to the economy. That's why we are determined to help them get through the downturn and prepare for recovery – and why we are doing everything we can to help the people at Corus who are facing the pain of redundancy.
When I visited the company's sites at Rotherham and Stocksbridge last month, I saw the resource centre set up to help employees leaving the firm. It is offering valuable support as they look for work – advising on writing CVs; providing coaching for interviews; and opening a
gateway to training so people can learn the new skills needed for jobs in new industries.
This is absolutely crucial, because Britain's rate of growth will be determined by how quickly we get people back to work and how
effectively Britain is equipped to compete for the jobs of the future.
If we took billions out of the economy today through cuts in public spending and investment, this would not only make the recession worse now but slow growth down the road. It is a mistake that British governments have made before. Cut investment in our underlying
strengths in a recession and we cut the foundations of the only way out of it: growth.
Of course, we have to tighten belts wherever we can now – including switching spending between different priorities and recognising medium term constraints. To make those decisions we have to have a clear sense of where Britain's public investment needs to go. Where will future growth and jobs come from?
They will be driven by private enterprise. It will be important to achieve higher levels of productive private investment and increasing UK exports to the expanding markets of the fast developing world. A decade of Government-led investment in Britain's research, science-base and universities, and our superb manufacturing base, have the potential to truly come into their own.
That is why over the last few weeks the Government announced three more strategic investments in these competitive strengths.
First, a package of measures to support Britain's life sciences
industry – including a 25m pilot scheme for getting selected innovative new medicines into the NHS more quickly.
Secondly, the Government's Low Carbon Industrial Strategy, which included practical support for testing facilities for wind and wave power prototypes and a new centre of excellence to build capacity in Britain's growing civil nuclear supply chain.
We have committed to making Britain a global leader in the production of low carbon vehicles, funding the biggest vehicle demonstration programme in the world, supporting urban recharging infrastructure and announcing subsidies for consumers willing to purchase the first generation of ultra low carbon cars after 2011.
Finally, we announced that we will fund 10,000 additional university students to study vital Science Technology Engineering and Mathematics subjects in 2009.
These investments build on the Government's commitments to upgrade the UK's digital infrastructure and the 150m Innovation Investment Fund, which will channel public and private venture capital to hi-tech British companies, with the aim of creating a 1bn fund over 10 years.
This is industrial policy, but not as we used to know it. It is not picking winners. It is making sure winning companies get the support they need. It invests in national capabilities, not national champions.
It involves the Government in doing only what the market alone won't – usually because the benefits can't be captured by a single company. No firm can sensibly bear the cost of an industrial biotech demonstrator facility, but Britain will struggle to develop strengths in renewable chemicals without one. So in June we funded one, and will help small companies use it.
This approach sees government making sure smart investments get made – but not turning itself into an investment manager.
It is difficult to know where the Conservatives stand on this active industrial role, except that they are committed to sharp cuts in government investment. The Tories' smartest analysts of industrial competitiveness know that this is about paying now for the growth that will pay back for all of us later.
It is crazy logic to argue that such investment is beyond our means in a recession. In effect, they are arguing that we should cut the plane's engines in mid-flight in order to save fuel. It doesn't take long to work out where that would leave us.
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Saturday 26 May 2012
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