Jim Armitage: George Osborne’s ‘march of the makers’ is limping as manufacturers struggle
Without a properly balanced recovery across the whole recovery, we’ll just be back to the old boom-bust routine of yesteryear
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Thursday 04 September 2014
Outlook Before we all get too carried away with the soaraway services industry, let’s not forget about poor old manufacturing. It was in the 2011 Budget that Chancellor George Osborne said he wanted to start a “march of the makers”. Three years later, despite the wider improvement in the global economy, there’s been little sign of it.
While the markets – particularly the pound – may have enjoyed yesterday’s data showing the overall economy climbing nicely, this was a typically knee-jerk reaction at a time when growth is slowing sharply in manufacturing.
It’s short termism because, without a properly balanced recovery across the whole recovery, we’ll just be back to the old boom-bust routine of yesteryear. I know that, because Mr Osborne told us so back in 2011.
In case you blinked and forgot it amid all the cheering around yesterday’s figures from the Chartered Institute of Purchasing and Supply – so strong for the bars, restaurants and financial services– manufacturing growth has fallen for its fourth straight month.
Sanctions against Russia took the blame for some of it, but that is only a recent phenomenon. Our makers were hurting long before Russia began flexing its muscles.
Exports – on which they rely – are struggling badly in the face of a far longer-term downturn in the eurozone than anybody had expected, while Chinese growth continues to disappoint. Meanwhile, our unbalanced economic recovery is boosting sterling, making life ever harder for manufacturers.
But what can we do about it? The measures Business Secretary Vince Cable has brought in – focused state help for a small number of key industries – has been sensible and is welcomed by most bosses. But it’s tinkering around the edges.
More fundamentally, we need a massive cultural change to make manufacturing sexier for our brightest youngsters. In France and Germany, being an engineer is a prestigious position. Their great inventors are celebrated. We should do the same, making media stars of our best.
It took a generation to dismantle our manufacturing base, and could take another to rebuild it. I suspect the march of the makers will be limping for long after Mr Osborne leaves office.
Spinners of nonsense try to grab a catchy headline
Mayhem in Ukraine, Iraq and Syria may make the world seem increasingly unbearable, but the heightened global attention on what Nato is going to do about the mess means its summit this week in Wales will be the most high profile in years.
And, if you believe some, that means one thing: big money.
Barclays’s head of Wales, John Union, reckons the summit could bring in a windfall of as much as £35m for the Welsh economy as delegates pack the local hotels, bars and restaurants.
But the immediate income for taxi firms, landlords and hoteliers is just the start of it, Barclays says. The blanket media coverage will give Wales its biggest marketing push ever across Europe and the US.
That, Mr Union says, will bring tourists from across the world rushing to Wales for their holidays next year, and set companies around the world salivating to invest there.
I’m not so sure. It seems to me far more likely that, with the global media coverage from Wales most likely spliced with images of journalists in orange jumpsuits awaiting their beheading, next summer’s vacation will be the last thing on viewers’ minds.
Local worthies and senior business folks are just trying to talk up Wales to win headlines for themselves and their employers. But the public are cleverer than they think.
People don’t like being spun with nonsense claims based on thin air. Such as the Government’s irritating re-announcement yesterday of Britain’s £3.5bn order for Scout armoured vehicles built in Wales by General Dynamics.
“300 jobs safeguarded!” we were told.
But this so-called “news”, timed to welcome the Nato summit, had already been announced in 2011.
Those in the Welsh defence industry might wryly recall the 185 redundancies pushed through by General Dynamics last year, as well as the hundreds of Welsh armed services job cuts in recent years.
But, hey, who cares if you can get a catchy headline.
Porn and bad language – just another day at the bank
Another day, another London bank in the dock. This time it’s Credit Suisse, and the courtroom is the Wall Street Journal, which details a seedy-looking situation where a trader allegedly breached company rules by sharing information about her clients with her husband at a rival bank.
Adding spice to the allegations is the claim that traders would gather around together and watch sex videos in the office, not to mention the regular use of racist, sexist and sweary language.
As with so many of these events, the supposed wrongdoers have committed their alleged sins – the trading leaks and shocking language – in the electronic messages they type into City chatrooms. That means they are all traceable and, in some cases, open for multiple traders to see.
The big banks, facing ever-higher fines from regulators, repeatedly urge their staff to stop writing such stuff, yet they still do it.
And these are the people whose intellect we trust to trade trillions of dollars of global capital every day.
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