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Not the way to bet

Summary:
Boris’s central economic policies are “levelling up“ and “green jobs”, the latter falling out of his ambitions for COP26. Unfortunately they run up against the obstinate truth that since WW2, it has never been wrong to bet against UK manufacturing. As we all know, this has been bad news for the individuals and regions once relying on it. Thus, the relative immiseration of Britain’s north and midlands, not to say the formerly-industrial working-class in general. Nothing works. In the mid-sixties, Kaldor’s Selective Employment Tax failed to give manufacturing the intended leg-up. For a generation after 1963, the Location of Office Bureau pushed only back and middle-office employment out of London - and often no further than smaller towns in the southeast. Apprenticeships suffer from

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Boris’s central economic policies are “levelling up“ and “green jobs”, the latter falling out of his ambitions for COP26. Unfortunately they run up against the obstinate truth that since WW2, it has never been wrong to bet against UK manufacturing. As we all know, this has been bad news for the individuals and regions once relying on it. Thus, the relative immiseration of Britain’s north and midlands, not to say the formerly-industrial working-class in general.

Nothing works. In the mid-sixties, Kaldor’s Selective Employment Tax failed to give manufacturing the intended leg-up. For a generation after 1963, the Location of Office Bureau pushed only back and middle-office employment out of London - and often no further than smaller towns in the southeast. Apprenticeships suffer from vanishing repute among middle-class or aspirational parents (would you want your child to have one?) and the blind-eye regulation of provincial banks under Blair and Brown, hoped to bring high-quality service jobs out of London, led the outfits concerned to spearhead Britain’s part in the financial collapse of 2008.

So is it hopeless? Almost certainly so, at least within the timescale of an electoral, business or reproductive cycle. Taking this last first: from a personal point of view, it is a longer-shot gamble than ever, for ambitious parents to bring up their kids as a bet against London, or at least the southeast.

As to public policy, officials are confined to:

- Palliative care, e.g. further rusticating government back-offices; and in the case of Channel Four and BBC News, risking the resilience of business models under threat from new media;

- Artless plans to create provincial tech hubs around Russell Group Universities, bound to fail as private investment which is value-added, i.e. associated with applicable skills and relationships, will hesitate to make excursions beyond the proposed Oxford-Cambridge tech corridor - if it ever happens;

- Gestures, e.g. HS2 if it ever happens. Ballooning costs make the railway unlikely to be extended. This means it is destined to frustrate its promoters’ intentions, by making Birmingham further subaltern to London, rather than goosing up the torpid city-regions of Yorkshire and Lancashire.

This is the context for Boris’s economic policies. He is a natural booster and we have to assume that his heart is in it. After all, he famously claimed to be “Brexitty Hezza”, invoking the great Tory interventionist and troublemaker; we may take it that he is not deaf to pillow-talk, and it may help with the kids who hate him but love greenery.

Unfortunately, nothing in 250 years of modern British economic history suggests that government has a contribution to make in such circumstances. Any money spent on the “levelling up” will be public funds, acceptable only by companies either in extremis or for the most cynical of reasons, e.g. to horde labour. As ever, truly promising businesses will seek out and be able to attract value-added money.

This takes us back to COP26 and the “green jobs” underpinning Boris’s net zero commitments. They suffer from similar problems for him: those with any gumption will see state money as the mark of Cain. In addition, the underlying policy relies upon immature technologies, where the bet is that learning-curve effects will tweak the physics and make the economics come good. If so, any profit-maximising promoter of fruitful developments will be looking for manufacturing facilities which are either overseas or labour-light. The private sector will be more suspicious than ever of government money, for fear that the price will be domestic production that is more labour intensive than industrially sensible.

Boris has made a political gamble, no surprise as he is a gambler. But his climate gamble is far riskier than Blair’s original commitments. These piggy-backed on Britain’s coincident move from coal to gas in power generation, guaranteeing that we could meet Blair’s carbon reduction targets. Boris is making bets of his own: that the tide of opinion will continue to flow green, that a enough unproved technology platforms deliver to keep the lights on and that a British government can do something it has never done: supervise an industrial paradigm shift. It’s not the way to bet.

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